UniCredit increases its stake in Commerzbank to 28% through financial derivatives

Italian bank UniCredit said on Wednesday it has raised its potential stake in Commerzbank to 28% using more derivatives, as markets watch whether it will make that leap by acquiring the German bank.

This represents an increase from 21% previously.

Italy’s second-largest bank said its ownership now consists of a direct stake of 9.5% and about 18.5% through derivative instruments.

UniCredit has applied to the European Central Bank for permission to acquire a stake of up to 29.9% in the German bank, with CEO Andrea Ursel simultaneously seeking to make a bid for Italian peer Banco BPM.

“This move reinforces UniCredit’s view that significant value exists within Commerzbank that needs to be crystallized,” UniCredit said in a press release on Wednesday. “It reflects faith in Germany, its businesses and communities, and the importance of a strong banking sector in driving Germany’s economic development.”

The lender stressed that its position remains “investment only” at the moment and does not impact its offer to Banco BPM.

Commerzbank said it “took note of the announcement” but declined to comment beyond referring to its strategy, which is currently being updated and will be unveiled on February 13.

This breaking news story is being updated.

— CNBC’s Greg Kennedy contributed to this report.