European Banks: Citi European Banks Weekly

Research evidence excerpt

European Banks: Citi European Banks Weekly

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European Banks

Citi European Banks Weekly 13 Jul 2026 04:21:58 ET

ACWestern Europe Andrew Coombs, CFA

Focus +44-20-7986-4053

Main events from last week included the final results of the UniCredit tender offer Simon Nellis

for Commerzbank, with a confirmed 17.6% pledged, which combined with the

+44-20-7986-4012

existing 26.8% stake and 3.2% equity TRS adds to 47.6% (or 49.7% ex treasury

shares). It now looks increasingly probable that UniCredit will have to consolidate Borja Ramirez Segura

Commerzbank and will likely look to replace the management board post the AGM +44-20-7508-0206

next year. Recall the “Commerzbank Unlocked” plan envisages a total €2.0bn pre-

Shrey Srivastava

tax value creation, o/w €0.8bn before a potential merger (phase 1) and €1.1bn as

+44-20-7986-2608part of a combination (phase 2). In order to execute “phase 1” control is enough i.e.

at least 50%+1 of the votes at the AGM, while a merger and thus “phase 2” requires

at least 75%+1 of the votes at the AGM. For our latest merger model see here.

Elsewhere the Bank of England proposed to allow banks to release the other

systemically important institution (O-SII) buffer that applies to certain domestic

systemically important firms in the event of systemic stress, similar to how it

already treats the countercyclical capital buffer (CCyB). This would lower the level

of capital at which distribution restrictions automatically apply, but stopped short

of outright reducing regulatory CET1 capital requirements. Similarly the leverage

ratio Tier 1 minimum requirements is to be reduced from 3.25% to 3% and instead

a simple general leverage ratio buffer will be applied, set at 25bps the leverage

exposure measure, which can similarly be released under stress.