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Sizing up Commerzbank's merger scenarios with UniCredit or ING

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Sizing up Commerzbank's merger scenarios with UniCredit or ING

Although merger talks with Deutsche Bank AG were abandoned in late April, Commerzbank AG is still an attractive target, especially for two big European banks with established operations in Germany.

Both UniCredit SpA and ING Groep NV have reportedly held talks with advisers about a potential tie-up with Commerzbank after having previously explored bids for the German group.

It is not certain that Commerzbank would be open to exploring another merger but if it is, a deal with either UniCredit or ING has the potential to shift the balance of power among privately held commercial lenders in the German market. S&P Global Market Intelligence highlights five essential metrics that demonstrate the potential changes.

Size of combined entity

A merger with UniCredit's German arm would bring Commerzbank closer to market leader Deutsche Bank in terms of assets than a tie-up with ING-DiBa AG would.

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Product mix

A merger with UniCredit would strengthen Commerzbank's corporate customer base, especially in the key small and midsize business segment. An ING-DiBa combination would enhance Commerzbank's retail operations.

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Branch network

Commerzbank would not have to worry about network overcapacity in an ING-DiBa merger as the latter has only three German branches. On the other hand, a merger with UniCredit would complement Commerzbank's existing domestic branches.

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Capital

UniCredit has a higher capital base compared to both ING-DiBa and Commerzbank, as well as the German peer average.

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Net income

ING-DiBa has a better track record of sustainable profits, without much fluctuation in recent years.

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Company-specific "Financial Highlights" are housed under the Templated Financials on the left-hand panel. Here is an example for Commerzbank AG.

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