Against the background of Unicredit's advances towards Commerzbank, a corporate anniversary is moving into the spotlight. In June, it will be 20 years since the takeover of HypoVereinsbank (HVB) by the Italian banking giant was sealed. In its defensive battle against Unicredit’s ambitions, Germany’s second-largest commercial bank argues that it would face the same fate as HVB should the Milan-based bank indeed take over the „Yellow Bank“ headquartered in Frankfurt. With that narrative, Commerzbank is attempting to stir up fears that it would be broken up under Unicredit’s control. It paints a distorted picture of HVB.

When then-HVB CEO Dieter Rampl and Unicredit CEO Alessandro Profumo appeared before the public in early summer 2005 to announce the merger of the two institutions, it came after long negotiations and was based on a mutual agreement. However, it wasn’t a merger of equals, but rather the acquisition of Germany’s third-largest commercial bank by a rising Italian player that originally emerged from the merger of several regional savings banks in Lombardy. HVB came under the umbrella of Unicredit.

HVB was forced into this step, as it was considered financially weak due to poor earnings. Profumo seized the opportunity, seeing the acquisition as a way to give Unicredit a significant boost in its push for internationalisation by entering the EU’s largest economy.

In this context, the current Unicredit CEO Andrea Orcel’s cautious approach is understandable. Given the strong resistance from Commerzbank’s leadership, he is waiting for a more favourable climate before moving forward. The federal government’s stake in Commerzbank complicates the takeover game. Experience from past cross-border banking deals of this scale shows that they are more likely to succeed when both sides reach an understanding beforehand. A hostile takeover attempt carries a much higher risk of failure. For now, Unicredit is sticking with its nearly 30% interest in Commerzbank – the threshold at which a mandatory takeover offer would be required.

Under the leadership of Orcel, who has led the banking group since 2021, Unicredit has tightened control over its Munich-based subsidiary. Since early 2024, HVB has operated as a GmbH (a private limited company), shedding its previous AG (public company) status. Its executive board was converted into a management team. The move gives the Italians more direct control over the Bavarian bank. Orcel also serves as HVB’s supervisory board chairman – the owner is using its strong position.

Orcel is streamlining HVB – like the entire banking group — for greater cost and sales efficiency. He is continuing a transformation that Unicredit gradually began after the financial crisis. At the time, the German subsidiary became a key pillar in the recovery of its Italian parent, which had suffered major losses. HVB developed into a highly profitable unit that managed the low-interest environment better than many of its peers. This was partly thanks to the 13 billion euros it received from Unicredit for Bank Austria. HVB has not relied on government aid during crises.

HVB was part of a series of cost-cutting and restructuring programs at Unicredit. The bank divested non-core activities, integrated corporate and investment banking, and scaled back its branch network. In 2005, it had 22,700 full-time employees. By the end of 2024, that number had dropped to just over 9,000. But HVB was not an isolated case – it followed a broader industry trend. Commerzbank, too, took a similar path after merging with Dresdner Bank. Orcel’s latest move is now prompting Commerzbank to adjust its strategy, which could strengthen its position in dealings with Unicredit.