UniCredit CEO Andrea Orcel Talks Commerzbank Deal | Bloomberg Talks

Well, Francine, I would say that we have waited for this moment for the last four years. We crowned 16 quarters of profitable growth. We are well prepared and we've laid the foundation for the next 12. And if you look at our messaging, not only did we reach record results of 9.7 billion, but we absorbed more than 1.3 billion on external recharges and reinforced further our provisions and kept intact our overlays. So for us, this was the start of the next 12 quarters where we would be more focused on growth and we would be in a position to offset the normalization of rates. So we've said that this moment was going to come. As we are today, I think we have one of very few banks that will be able to keep cost flat in the next three years, that will be able to keep cost of risk flat in the next three years, and that has built factories to such an extent that our fee income will be able to offset initially most, but increasingly more than proportionally, the compression of NII coming from rates. So whatever happens, that will be under control. And then you have all the M&A that you're possibly looking at. Well, you can never say whatever happens, but I think we're very, very confident of what we're going to deliver. I think this year is not only for us a record in terms of net profit, profitability, and distribution, and 9 billion is also the start of the next three years where we want to first match and then increasingly beat that.

Well, let's say that the investment in Generali is for us, as I have said, completely financial. We have no intention to buy or move strategically on Generali. They have been partners of ours for a long time. We distribute their products in a number of markets. We might be distributing some of their asset management. And it was the right thing to do when we built it up. It was leaked. When it was leaked, we said that our client had about 6%, we were at about 4.7. Now we are just over 5%. Honestly, I don't think it's very significant. I mean, there's quite a lot of people in Italy saying it also gives you leverage to negotiate with the government or the parties into what you're trying to do. But with Banco BPM, is there any truth in that that it's a good investment but also gives you an advantage? Look, it's a good investment. And we obviously, by having these stakes, we are a party to talk to. I wouldn't go as far as putting it as leverage or looking at a theory of a coordinated approach on BPM. So it's nothing more than actually you find it a good investment for the time being. It is a good investment that has returned well. We built it over several months and we're sitting on a good capital gain which is partially hedged. So for us, it's a good thing for the bank.

Well, I don't know. From our standpoint, we were invited. We did what we said we would do because as we were invited, then we crossed to 9%. We said we would reach 29%, we reached 29%. We said we would ask for authorization from the regulator, we asked for that authorization. We also said when the tone changed that we would wait and not launch a transaction until we had the opportunity to sit down, go through the details, and explain the benefit that this transaction has not only for the two banks and their stakeholders, but also for the sector, German industry, and Europe. So we're optimistic that when the emotions are off the table and we can focus on what this really is and what it brings, we're going to be successful in having support.

It's just that if you look at the timeline of elections, of forming a government, of having discussions and everything else, you're looking at three to four quarters minimum. And therefore that allows us as an investor to have an influence, see what the performance of Commerzbank really is going to be, and then take a decision when we have all the elements.

Well, look, I think we'll see tomorrow, but we all would be surprised if the plan was not optimistic. It always is when someone tries to fend off attention that they are not pleased about. I think for me, the important is: does the plan strengthen the bank? It's overly focused on cost reduction, I think it is. Does it strengthen the bank? Which means you search for efficiency, targeting your cost reduction in the areas that do not add value, that are duplicative, that are overhead, etc. But you then use a lot of that money, in our case more than 23%, reinvesting in the bank in technology, in data, in the network, in the factories, in strengthening the overall bank and in the people. I think for us, seeing plans that go into this direction, which we feel is our blueprint, gives us comfort. Seeing plans that just put up reduction doesn't. More importantly, specifically with respect to Commerzbank, I would say that there is a concern on the state of their technology, the essence, the fragmentation, whether or not they have ever integrated the two systems of Commerzbank and Dresdner from the acquisition, whether they're investing enough to modernize as opposed to just run. And their corporate center has almost 45% of their assets. There is very little information on what those assets are, their duration, their risk, their rates, fixed rate or not fixed rate, and most importantly how that is important to running the core business. Because I do think that nowadays banks have moved away from having a large corporate center with large assets that really don't have a day-to-day impact on running the business and move on realizing results on running the business day after day.