The newly appointed chief executive officer of Commerzbank has issued a stark warning about the potential consequences of a merger with Italian banking giant UniCredit, stating it would result in a significant loss of clients and a lower credit rating.

In her first interview since taking the helm at Germany's second-largest lender, Bettina Orlopp told German newspaper Handelsblatt that a merger would lead to serious complications. "Our rating would deteriorate, probably significantly," she said, noting that this would have severe implications for the bank's operations.

"We would lose clients who have specific rating requirements and only do business with banks that have top credit ratings," Orlopp explained. The German bank currently holds an A- rating from S&P, while UniCredit sits three notches lower at BBB.

The comments come after UniCredit, led by chief executive officer Andrea Orcel, acquired a 9 per cent stake in Commerzbank in September, with additional financial instruments bringing their effective control to 21 per cent of shares.

Orlopp also highlighted the operational challenges of merging large financial institutions, drawing from Commerzbank's own experience with its 2008 Dresdner Bank acquisition. "We can't afford such stagnation in today's world, which is characterised by rapid technological change and intense competition," she emphasised.

Despite mounting speculation about a potential takeover, Orlopp revealed that merger discussions were not on the agenda during the first meeting between senior management teams in late September. "It was a typical investor discussion. UniCredit is now a larger shareholder, and professional dialogue about Commerzbank's business development is part of that," she stated.

The proposed merger faces significant political hurdles in Germany, with Chancellor Olaf Scholz joining Commerzbank's management and employees in opposing the takeover. However, some major investors and business leaders have expressed support for opening discussions about a potential deal, which would represent one of the most significant attempts at creating a pan-European banking institution.

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