15 February 2024, Hesse, Frankfurt/M.: The lettering “Commerzbank” can be seen on the Commerzbank Tower in the center of the banking city. Boosted by the turnaround in interest rates, Commerzbank is aiming for another profit increase after a record year. Photo: Helmut Fricke/dpa (Photo by Helmut Fricke/picture alliance via Getty Images)
Two-thirds of the jobs at Commerzbank could disappear if UniCredit successfully carries out a hostile takeover of the German lender, a Commerzbank supervisory board member warned on Tuesday.
Stefan Wittmann, who is also a senior official at German trade union Verdi, told CNBC’s Annette Weisbach that “we certainly hope we can avoid” a hostile takeover by the Italian bank. Witmann said Commerzbank’s board had called on the German government to carry out an internal review of the possible takeover, which he hopes will give the bank a six-month period to take stock of the situation.
“But if it [a hostile takeover] is unavoidable, we think that two-thirds of jobs will disappear, that there will be another significant cut in the branches,” he said, according to a translation.
“We will see in particular that UniCredit does not want all Commerzbank customers at all, but that it focuses on the supposedly best customers, namely the wealthy customers,” he added.
Berlin, which was the largest shareholder of Commerzbank after it injected 18.2 billion euros ($20.2 billion) to rescue the lender during the 2008 financial crisis, is likely to play a key role in any potential merger between the banks.
“We are actually concerned with our economic and industrial responsibility. As far as the workforce is concerned, which trade unions are of course particularly focused on, they would always lose out in the merger, regardless of the point in time,” Wittmann said. The bank has yet to respond to a request for comment on Wittmann’s statements.
UniCredit announced Monday it had increased its stake in the German lender to around 21% and submitted a request to boost that holding to up to 29.9%, signaling a takeover bid might be in the cards. Earlier this month, the Italian bank took a 9% stake in Commerzbank, confirming that half of this shareholding was acquired from the German government.
UniCredit believes substantial value can be unlocked within Commerzbank, Germany’s second-largest lender, but it said that further action is required for that value to be “crystalized.”
German Chancellor Olaf Scholz criticized UniCredit’s move on Monday, saying, “unfriendly attacks, hostile takeovers are not a good thing for banks and that is why the German government has clearly positioned itself in this direction,” Reuters reported.
‘Very tense’
Commerzbank’s supervisory board is due to meet this week to discuss UniCredit’s stake, people familiar with the matter who asked to remain anonymous previously told CNBC.
Wittmann said the mood is currently “very tense” within the company, adding that the bank was surprised by UniCredit’s announcement on Monday, which he described as a “180 degree-turn within 48 hours.”
“[UniCredit CEO Andrea Orcel] last spoke on Friday that he wanted a friendly takeover in agreement with all stakeholders and politicians. And yesterday we were surprised by his hostile takeover attempt. That doesn’t add up,” Wittmann said.
The supervisory board member explained that the two main reasons to regard a potential merger in a critical light are the lack of a banking union in Europe, and the fact that UniCredit has “absorbed itself with Italian government bonds in recent years.”
He questioned what might happen should geopolitical tensions or “upheavals” impact UniCredit’s availability of capital to finance Commerzbank’s industry.
In response to the 2008 financial crisis, the European Commission announced plans to create a banking union to improve the regulation and supervision of banks across the region.
Economist and former European Central Bank Governor Mario Draghi flagged in a recent report that banks in Europe face regulatory hurdles which “constrain their capacity to lend,” also citing the “incomplete” banking union as one factor that impacts competitiveness for the region’s banks.
“We have always spoken out, including as employee representatives on the Supervisory Board, that there can and should be mergers at [a] European level, but only when the banking union is in place. And that is just our second point of criticism, that we say: create the rules of the game and the guardrails first, and then do it sensibly when it is clear which playing field we are on,” Wittmann said.
Check out the companies making headlines before the bell. Procter & Gamble — The stock fell 0.8% after reporting weaker-than-expected revenue. The household goods maker posted $21.74 billion in revenue while analysts polled by LSEG had estimated $21.91 billion. The company attributed the miss to lower demand in China. Adjusted earnings per share of $1.93 topped estimates of $1.90 per share. Netflix — Shares popped 6.3% after the streaming giant exceeded Wall Street’s third-quarter expectations. Netflix reported earnings per share of $5.40 on revenue of $9.83 billion, while analysts polled by LSEG forecast earnings of $5.12 a share on revenue of m $9.77 billion. The company also saw its ad-supported membership tier jump 34% quarter-over-quarter. CVS Health – Shares tumbled 11% after the drug store chain announced longtime executive David Joyner has replaced Karen Lynch as CEO. CVS also guided for third-quarter adjusted earnings between $1.05 and $1.10 per share, less than the $1.69 a share expected from analysts polled by Fact Set. WD-40 — The maintenance product maker’s shares fell 4% after a disappointing fiscal fourth-quarter earnings report. The company reported $1.23 earnings per share, versus FactSet consensus forecasts of earnings of $1.34 per share. Full-year earnings guidance between $5.20 and $5.45 per share also came in short of estimates for $5.69 per share. Western Alliance Bancorp — The regional bank stock dropped more than 4%. Despite posting a top-line beat of $823 million in revenue versus LSEG analysts’ estimates for $808 million, net interest income fell 3% in the third-quarter. American Express — Shares of the credit card company ticked down 3.4% on a mixed earnings report. Revenue of $16.64 billion fell short of the LSEG consensus forecast for $16.67 billion. However, earnings of $3.49 per share topped forecasts of $3.28. Apple — The tech giant advanced 2% after Bloomberg reported that iPhone sales in China jumped 20% year-over-year in the first three weeks of sales. Coherent — The semiconductor materials stock tumbled more than 5% after B.Riley downgraded shares to neutral from buy, citing limited upside potential after shares soared 142% in 2024. SLB — Shares dipped 1.7% after Schlumberger posted third-quarter revenue that fell short of estimates. Revenue of $9.16 billion fell below the $9.25 billion LSEG consensus forecast. On the other hand, adjusted earnings of 89 cents per share topped the 88 cents earnings per share expectation. Intuitive Surgical — The stock added more than 6% after the maker of the da Vinci surgical robot beat on both top and bottom lines in the third quarter. Intuitive Surgical earned $1.84 per share on $2.04 billion in revenue, while analysts surveyed by LSEG had predicted earnings of $1.63 per share on $2 billion in revenue. Ally Financial – The digital bank stock fell nearly 1% despite earnings beating analysts’ estimates in the third quarter. The company announced adjusted earnings per share of 95 cents on $2.1 billion in revenue. Analysts surveyed by FactSet had called for 52 cents earnings per share and revenue of $2.03 billion. Crown Holdings — The consumer goods packaging company ticked up more than 4% after raising its full-year guidance. Crown Holdings is guiding toward adjusted earnings per share falling between $6.25 and $6.35 per share. Analysts had expected $6.15 earnings per share, per FactSet. Adjusted earnings topped estimates in the third quarter, while revenue came in line with forecasts. Comerica — Shares of the mid-sized bank ticked up nearly 1% after a stronger-than-expected report for the third quarter. Comerica generated $1.33 in earnings per share on $534 million of revenue, compared to $1.17 per share and $527.9 million of revenue expected by analysts, according to FactSet. Net income for the bank was down year over year. — CNBC’s Pia Singh, Sarah Min, Jesse Pound, Michelle Fox contributed reporting
Barrons Roundtable discusses reports that Gen Z members are aggressive about wanting to retire.
Gen Z is the youngest generation of adults today, but with many struggling to make ends meet, a growing proportion say they do not expect to retire and few are socking away money to do so.
A new report from the TIAA Institute and UTA’s NextGen Practice found that a greater share of these adults age 27 and below do not anticipate retiring – at least in the traditional sense – after prior data showed nearly half of young adults either don’t want to retire, don’t believe they will be able to afford to, or are not thinking about it at all.
Gen Z as a whole has a very different view of retirement than previous generations, and a growing proportion of young adults say they do not plan on retiring at all. (iStock / iStock)
What’s more, just 20% of Gen Z respondents of working age say they are saving for retirement at all. While planning for retirement is important for everyone, saving for the future is critical for this generation that is projected to live past 100 years old. Yet, a higher cost of living could be impacting their ability to do so.
The study found that almost one-third of Gen Z (29%) are living paycheck-to-paycheck, with most of their money going to funding their basic needs, making it increasingly difficult for them to achieve financial milestones like homeownership while saving for their financial futures.
“Thirty-six percent of respondents cited high debt or low income as the primary reason they are not saving for retirement,” Surya Kolluri, head of the TIAA Institute told FOX Business. “Gen Z is spending more on essentials than previous generations.”
Inflation is weighing on Gen Z’s finances more than prior generations, data shows. (iStock / iStock)
Kolluri said it is true that Gen Z is bearing the brunt of inflation more than the generations that preceded them, noting that as of this year, the annual inflation rate for Gen Z was half a percent higher than it was for other generations at the same age.
But Kolluri pointed to some positive findings in the data, too. He said that while only 1 in 5 reported saving for retirement, 66% of those who are saving for retirement are doing so through 401(k)s.
Empower President and CEO Ed Murphy discusses retirement planning on ‘The Claman Countdown.’
There is also at least an awareness amid Gen Z’ers that it is important to save for the future. Eighty-four percent report saving a portion of their income each month (albeit not for retirement), and 57% say they have a budget that they stick to.
Kolluri noted 52% of Gen Z reported putting savings into savings accounts because they value the liquidity that supports current financial freedom.
“They do not equate saving for retirement as helping to ensure their financial freedom later in life…and ‘freedom’ is a concept that is very important to Gen Z,” he said. “They want flexibility and access to savings if and as they want.”