UniCredit CEO: Taking control of Commerzbank is 'not the expected scenario'

Well, this is our 21st quarter successively of record numbers. I think it demonstrates our consistency, our sustainability, and that the transformation is underpinning all of these results. We have a beat across all the lines on the P&L. We have a beat on core revenues. We have a beat on gross revenues. The equity investment complemented the core revenues and worked out better than we expected. Costs are down 2% on an equal perimeter. Gross operating profit is 8% higher, 12 if we exclude the compression of Russia, and net profit is up 16%, 22 if we exclude Russia. So, all of this, in our opinion, points to two things. One, that we continue to deliver in the short term, well diversified, but two, that the continued transformation underpinned a dispersion and a positive performance on a relative basis.

Well, look, the commercial momentum is very strong. We had our lending is up 6%. Our deposits, excluding Russia, are up 6%. Our fees are up 8 or 9% depending what you consider. So, from that standpoint, the underlying business is well diversified and performing very well. Now, the environment is what it is. The geopolitics are what they are. The macro is what they are. We focus on what we control. For the time being, we have no indication of deceleration. The asset quality looks good. As you saw, our NPL went down. Our coverage went up. We didn't touch the overlays. So, I can only say we're well prepared. And based on the environment we see today and the secondary impact, because the entire business is focused on Europe, differently from a lot of our peers, we see only secondary impact and we think we can deliver this year and beyond. So,

Well, at the moment we have no indication whatsoever of that, and we are in May already. So, the gut feeling tells you at some point it will arrive. That's why we're prepared. That's why our coverage is higher than it was and our overlays are untouched so that we can offset that if and when it comes. But at the moment, we have no indications.

Well, that's one of the key points because if you look at the performance of European banks when there was a deceleration in growth and a hike in interest rates when Russia invaded Ukraine and you do a translation to today, you see that a decline in growth and a greater inflation is not necessarily negative if you have your cost under control and if your margins expand. At the moment, our NII, with declining interest rates, has been effectively flat quarter on quarter and was starting to rise in Q2 and beyond as we guided. But if rates go up as the ECB is indicating, that's a tailwind. Not a massive one. We're not going to see the repeat of a couple years ago.

Well, I think we had 5 years of Unlocked where we went for efficiency, let's call it in the old scenario. UniCredit just continued that striving for efficiency, but shifts the focus to greater acceleration on the revenue side. So, one of the lines of our cost-to-income ratio, by taking shares in targeted segment. You see that with the loan growth that we are having and with the fee growth that we are having. On the bottom on the cost line, we continue to re-engineer, rethink, but this time with AI, the incremental progress we're making is greater. So, instead of redesigning an entire process and saving in a number of areas, now we can, in some cases, eliminate the entire process because AI replaces what we're doing now manually or what we're doing now with technology.

Well, look, for us, Commerzbank... Let me start with something else. I mean, we are 100% focused on UniCredit. That is our main show. This is where the entire organization is going. And then when you look at your numbers, we do not need that offer. For us, the offer was a way to engage, break the stalemate, and potentially, together with a joint plan, consider upgrading the terms of the offer. It was not to be so. At the moment, the terms are clear. What we would do is clear. The offer opens today. It's up to shareholders. What I would add is for UniCredit shareholders, it's a win-win. We end up below control, hopefully above 30%, but below control. The financial returns of what we would do there would be exceptional because we would be well above 20% returns. They would underpin our own results. And if indeed Commerzbank upgrades as we are all expecting their numbers with the momentum 2.0 they're coming out with, that's a plus. If it goes badly, we have our put option. We are hedged. If we get to control, which is not the expected scenario at the moment, what we would do is very clear, and the returns on that would be an add-on to UniCredit, and I think very positive for our shareholders and also for the shareholders of Commerzbank. But it's up to them. We're not really fretting it. We are just focusing on our own delivery, and we've done all we could to engage, and now we are just looking at what shareholders will do.

Well, look, I think since we made that investment, we got momentum that was quite welcome by the market. We're going to get momentum 2.0 that is expected to improve. So, our presence is driving Commerzbank to review everything they need to review and try to extract more value, be more ambitious, change things in a better way. So, that can only be positive for everybody. We think, however, that strategically and philosophically, we believe very strongly on core business versus side shows, and we believe that Commerzbank should focus all its energy on Germany and on Poland and less so in unrelated growth externally. But that is their decision until we're there. I wouldn't say that we're going to change our posture, but now our opinion is very, very visible. What we think should be done is very, very visible, and quarter after quarter, we will observe what happens and our views will be clear.

Well, I think this is... From a UniCredit standpoint, we continue to push the envelope. We continue to put these issues on the table. I think Europe needs to come together. Banking union, capital market union, energy, defense. I think Europeans need to understand that we will be able to protect our principal values and culture a lot better if we're a stronger economic block, and to be a stronger economic block, we need to put together to common denominator our pipes. What will happen? It's a challenge for politicians and it's a challenge for business leaders to try and push in this direction, and we'll see.