UniCredit CEO Andrea Orcel has identified Poland as a potential country for future mergers and acquisitions, alongside Italy and Germany, reported Reuters.  

Since assuming his role at the helm of the Milan-based bank, Orcel has been open to exploring M&A opportunities within the bank’s operational footprint, which spans 13 countries. 

The pursuit of Banco BPM by UniCredit did not materialise in this year.  

UniCredit increased its equity stake to 26% in Commerzbank in August this year by converting more of its synthetic positions into physical shares.    

Earlier this month, Commerzbank CEO Bettina Orlopp has stated that UniCredit will not be acquiring the German financial institution. 

At a recent industry conference hosted by BofA Securities, Orcel pointed out that M&A activities in the markets of Italy, Germany, and Poland could “make very material change to our equity story … a quantum difference in what we are and what is our profitability.” 

The bank’s strategy for re-entering the Polish market is set to unfold in the fourth quarter, following the acquisition of Vodeno, a banking technology firm, and Aion, a digital bank with operations in Poland.  

He added: “Poland is the trickiest, because by not being there and going organic, we don’t have synergies, or we have more limited synergies than an in-market deal.” 

Reports also indicate that UniCredit is bolstering its team in Poland by recruiting investment bankers, including those from a former Santander team, the news agency stated citing local press.  

UniCredit’s divestiture from Bank Pekao in Poland between 2016 and 2019 marked its exit from the market, but plans are afoot for a strategic comeback.  

In Greece, UniCredit’s stake in Alpha Bank stands at 26%, with a portion of this held in derivatives.  

The bank is anticipating regulatory approval to increase this stake to a maximum of 29.9% by the year’s end, the report said.  

In the wake of the Banco BPM deal falling through, UniCredit is set to increase its market share in its home country, while maintaining its investment in Commerzbank, which has been structured to minimise risk and guarantee a 20% investment return. 

“We’re just waiting … if things go well, we can’t be happier,” Orcel said. “We can just sit there, we’re no longer hostage of the market,” he said in reference to the Commerzbank stake. 

Orcel also noted that recent investments in equity stakes and the complete acquisition of the bank’s life insurance arm have utilised between €6.75bn and €7.5bn of UniCredit’s capital reserves, which was above the bank’s preferred threshold.  

These investments, along with an additional accounting advantage from the insurance sector, have effectively increased the bank’s surplus capital to between €10bn and €11.5bn.

This additional capital could potentially enhance the bank’s standard cash-and-share distribution, which currently stands at 80%. 

The bank will deliberate on the optimal use of the surplus capital in the coming years, with a decision expected between 2028 and 2030. Options include reinvestment in the bank’s growth or distribution to shareholders.