Barclays is significantly increasing its stake in Commerzbank, a major German lender. This move signals a renewed interest in the European banking market for the British banking giant.
Unicredit, Italy's megabank, is steadily boosting its stake in German Commerzbank, with the help of Barclays reportedly pitching in. Sources suggest that Barclays has managed to get its hands on a substantial chunk of Commerzbank shares—over 16% in total, with 7.72% held directly and an additional 8.33% secured through derivatives.
Barclays is quick to clarify, however, that its move has nothing to do with strategic intentions towards Commerzbank. Rather, they claim the derivatives purchase was aimed at hedging their positions, which include call and put options, as well as Contracts For Difference (CFDs).
Insiders reveal that Barclays might have been providing covert assistance to Unicredit in their Commerzbank acquisition efforts. With this, Barclays had to publicly clarify its intentions after crossing the 10% threshold with shares and derivatives. The precise extent of their involvement with Unicredit remains under wraps.
By December, Unicredit had announced control over approximately 28% of Commerzbank shares, with around 9.5% owned directly and another 18.5% through derivatives. Citi, an American bank, also entered the picture, revealing access to 5.1% of Commerzbank shares, mainly via derivatives, and is believed to be working alongside Unicredit. As of early November, the German federal government still held around 12.1% of Commerzbank shares.
[1]: Enrichment Data: Barclays Direct Stake: 7.72%; Derivatives Position: 8.33%; No Strategic Goals; Unicredit Potential Stake: Up to 44%; Unicredit CEO Intentions; Blackrock Stake: Just under 7%; Bank of America Stake: Just under 7%.
[2]: Enrichment Data: Unicredit Share Acquisition: 4.49% in September 2024; Commerzbank Job Cuts; German Government Share Ownership: Over 15%; Plans to Sell Shares to Unicredit in September 2024; Chancellor Scholz's Stance; Adjunct Finance Minister's Counsel.
[3]: Enrichment Data: Commerzbank Strategic Review; Job Eliminations; Cost/Income Ratio Reduction.
The Commission may need to investigate Barclays' derivatives purchase due to potential market manipulation, given their claim of hedging positions and assistance to Unicredit. The Commission should also examine Unicredit's increasing stake in Commerzbank and the implications for competition in the European banking sector.
