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Savvy chess players do not commit to a specific game plan from the start. They create options and adjust their strategy as they go. UniCredit CEO Andrea Orcel presents a similar approach to the consolidation of European banks. The Italian lender Offer of 10.1 billion euros for its national rival Banco BPMwhich closely follows its acquisition of a stake in German bank Commerzbank, is a low-ball approach that is unlikely to succeed. But that gives Orcel room to maneuver.

Before this decision, the Italian executive risked finding itself stuck. He parked his tanks on the Commerzbank lawn near build participationbut getting all the explicit and implicit approvals needed to increase that participation has turned into a long-term task, not least because Orcel will have to sit tight until a new German government is in place.

UniCredit’s approach to BPM suggests that Orcel doesn’t want to miss out on opportunities closer to home in the meantime. Earlier this month, the northern Italian lender bought 5 percent of Monte dei Paschi di Siena of the Italian government. BPM is also in talks to buy asset manager Anima, which itself owns shares in Italy’s oldest bank. Together, a potential 9 percent stake sparked rumors that the two mid-sized banks were heading toward a tie-up.

Monte dei Paschi isn’t the only BPM option either. Credit Agricole bought 9.2 percent of the bank in 2022. Given UniCredit’s entry into Commerzbank, it is entirely possible that the continent’s major lenders will blow their cobwebs. their own cross-border mergers and acquisitions plans.

UniCredit’s offer on BPM puts a useful brake on everyone’s work. This will make it more difficult for smaller lenders to buy or be bought out. It also indicates that UniCredit is not keen on the idea of ​​buying Commerzbank, sending a message to the German bank’s recalcitrant board and stakeholders.

The problem is that UniCredit will have to improve its offering if it wants to secure BPM. The current all-stock offer is broadly in line with Friday’s closing price. It is true that BPM shares have been rising recently due to speculation about the Anima deal and the MPS deal. But this only highlights that there are other ways to create value.

In theory at least, UniCredit has the opportunity to do better. Including Anima, BPM is expected to generate €1.6 billion in net profit by 2026, according to Equita’s Andrea Lisi. This, combined with €800 million in annual after-tax savings and improved revenue, would provide UniCredit with an additional €2.4 billion in net income by 2026, for a 20 percent return on investment. .

This kind of calculation is only valid if UniCredit shareholders support Orcel’s strategy. Given the uncertainty surrounding his plans, this is by no means a given. The 5 percent drop in UniCredit shares on Monday shows the work it has to do to keep them on the agenda.

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