The German government has opened discussions with UniCredit about obtaining a larger portion of Commerzbank.

The news comes via Reuters, with a German government source telling the news agency that it was for the banks to work out what they wanted. While the German government is not against a potential merger, it recognised that Commerzbank is opposed to the move.

"We must take Commerzbank's wishes into consideration. There is obviously a strong rejection by the workforce," the source told Reuters.

The German government currently owns a stake in Frankfurt-headquartered bank worth around 12 per cent.

Andrea Orcel, chief executive at UniCredit has said "all options are on the table", including reducing the stake.

According to Reutuers he said he would "engage with all the stakeholders and see if the basis for a combination is there,” and would be interested in buying a larger share of the government's holding in the bank.

Earlier this month, the Italian lender announced that it had purchased a nine per cent stake in the German bank, through market activity and a 4.49 per cent purchase from the Federal Republic of Germany.

Sources told Reuters that the move annoyed some government officials as well as leaders at Commerzbank’s headquarters.

FStech has reached out to Commerzbank and UniCredit for comment.

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