Commerzbank’s Credit Rating at Risk in Potential UniCredit Takeover, Warns S&P

Credit rating agency S&P Global has sounded a note of caution regarding the potential impact of a UniCredit takeover on Commerzbank’s credit rating. In a statement released Thursday, S&P acknowledged the uncertainty surrounding UniCredit’s ability to acquire a controlling stake in the German lender but highlighted the potential risks to Commerzbank’s creditworthiness should a deal materialize.

S&P emphasized that Commerzbank currently enjoys a stronger credit rating than UniCredit and its subsidiaries. Consequently, any acquisition by the Italian banking group could exert downward pressure on Commerzbank’s ratings.

This assessment underscores the complexities and potential downsides of a cross-border merger between the two banks. While UniCredit views Commerzbank as an attractive target for expanding its European footprint, the deal has faced significant opposition in Germany, with concerns raised about potential job losses, branch closures, and the impact on lending to German businesses.

S&P’s warning adds another layer of complexity to the situation, highlighting the potential financial implications for Commerzbank beyond the immediate strategic considerations. A credit rating downgrade could increase the bank’s borrowing costs and potentially limit its access to capital markets.

The coming weeks will be crucial as UniCredit assesses its options and determines whether to proceed with its pursuit of Commerzbank despite growing resistance from German stakeholders and the potential impact on the target’s creditworthiness.