Commerzbank Plans to Sell SRT Tied to €2 Billion of Loans | Company Business News

(Bloomberg) — Commerzbank AG plans to sell a significant risk transfer tied to a portfolio of corporate loans, according to people familiar with the matter, as the German lender moves to free up capital to fend off a potential takeover bid from UniCredit SpA.

Frankfurt-based Commerzbank aims to issue an SRT tied to €2 billion ($2.4 billion) of loans, according to the people, who asked not to be named. The size of the SRT would be around 6.9% of the reference portfolio or about €140 million, they added. A representative for Commerzbank declined to comment.

While Commerzbank has used SRTs for years, such transactions are now part of a wider plan by Chief Executive Officer Bettina Orlopp to keep the lender independent. Moody’s Ratings on Thursday raised Commerzbank’s credit rating, citing strengthened capitalization and improved profitability.

UniCredit, led by Chief Executive Officer Andrea Orcel, bought a stake in Commerzbank from Germany’s government in September and subsequently increased its holding. Orcel has renewed his push for a deal that he says would create a European banking champion, sending a letter last month to top German officials including Chancellor Friedrich Merz.

Orlopp is seeking to unlock more capital, partly by using more significant risk transfers. Commerzbank’s corporate clients unit expects SRTs to help it cut €10 billion in so-called risk-weighted assets in the years through 2028, division head Michael Kotzbauer said in a presentation on Thursday.

Global sales of SRTs are expected to grow 11% on average over the next two years, according to a recent Bloomberg Intelligence survey. Aareal Bank AG, Erste Group Bank AG, Standard Chartered Plc and ING Groep NV are currently discussing or finalizing such deals.

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