Commerzbank in talks with UniCredit, CEO says

By Tom Sims, Valentina Za and Jörn Poltz

FRANKFURT, Aug 6 (Reuters) - Germany's Commerzbank has begun talks with UniCredit over a possible takeover by the Italian lender, it said after better than expected quarterly results on Thursday, adding that a common approach by the banks can create value.

Public announcement of a resumption in talks and a more conciliatory tone mark major developments in the two-year battle for ownership of Germany's second-biggest bank by its Italian counterpart.

The saga has taken a dramatic turn in recent weeks, with UniCredit edging towards control as Commerzbank officials signalled talks would soon resume after UniCredit's €45 billion ($52 billion) hostile takeover approach.

'DETERMINED TO CREATE VALUE'

"We have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank, as we are both determined to create value for our shareholders, clients and employees," Commerzbank CEO Bettina Orlopp told analysts.

"I'm optimistic that, step by step, we can find common ground on governance and also on the business model."

Orlopp and her management team have long ​been opposed to a tie-up with UniCredit. There have been several rounds of talks but all have ended in disagreement.

It was unclear whether the latest talks were formal negotiations and UniCredit did not respond immediately to a request for comment on Orlopp's remarks.

Orlopp added that it was in the best interest of both banks to move as quickly as possible and that they would try to identify possible cost savings and whether the banks could join forces on large investment programmes.

A Commerzbank presentation on Thursday also showed its increasing willingness to work with UniCredit on a possible deal as the Italian bank nears control, having built a 48% stake in its target.

Orlopp said that UniCredit, even with its large stake, needs to work with her management team on a path forward rather than act unilaterally on any structural changes.

"It requires a shared understanding of the business model and the involvement of all stakeholders," she said after the German lender reported a 94% jump in second-quarter net profit, helped by stronger commission income.

Thursday also offered an opportunity for management of both banks to exchange views in a long-scheduled investor call.

Commerzbank reported second-quarter net profit of €898 million, up from €462 million a year earlier and beating analyst expectations of €845 million in a consensus forecast published by the bank.

A person familiar with UniCredit's thinking said before the results announcement that the Italian suitor was watching to see if Commerzbank shifts focus to Germany and away from international lending and trading, exposing a difference in opinion on strategy.

Commerzbank has said its international network is key to its strategy.

UniCredit Chief Executive Andrea Orcel recently said that he wanted to negotiate with the German government and Commerzbank employees, sidestepping the German lender's management.

The German Finance Ministry, which oversees a 12% stake that the government has held since Commerzbank's bailout during the global financial crisis, said through a spokesperson that it was up to the two banks to discuss how to proceed and criticised UniCredit's "aggressive approach".

German opposition to Orcel's overtures has ​been widespread, emphasising ⁠the difficulty of merging large banks across euro zone countries to help them compete with bigger U.S. rivals.

($1 = 0.8662 euros)

(Reporting by Tom Sims, Valentina Za and Joern PoltzAdditional reporting by Christian KraemerEditing by Linda Pasquini, Tom Hogue and David Goodman)