UniCredit has announced its approach for the transformation of Commerzbank, the latest stage in its bid to take over its German rival.

The 34-slide presentation, delivered by UniCredit chief executive Andrea Orcel on Monday morning, suggested that Commerzbank is overvalued and underperforming. The plan it laid out is intended to bring the bank’s net profit to €5.1 billion by 2028, nearly €1 billion high than current projections.

The plan would involve focusing on Commerzbank’s core markets of Germany and Poland over international expansion, which UniCredit described as “aggressive and risk[y]”. It also attacks Commerzbank’s current “Momentum” strategy, arguing it leaves the bank ill-equipped to deal with US and fintech entrants to the German market and could require additional restructuring charges.

At the start of the month, Commerzbank confirmed that it had held talks with UniCredit over a buyout, but rejected the lender’s €35 billion offer citing insufficient value for shareholders. The all-share bid attempt began in March when UniCredit acquired a position of almost 29 per cent, becoming the German lender’s largest shareholder.

At the time, Orcel claimed that a takeover was unlikely, but the Italian bank has since aggressively pursued acquisition. This is, in part, where Commerzbank’s hesitancy comes from: when declining the acquisition, it said that the unsolicited nature of the bid made it "difficult to build the mutual trust necessary for a successful transaction”.

Commerzbank stock is currently trading up 0.86 per cent, while UniCredit has fallen by 2 per cent since the presentation.

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