Germany to hold onto Commerzbank stake as lender aims for independence

Germany will not sell any more shares in Commerzbank for now and the bank's strategy is "geared towards independence," the country's Finance Agency said on Friday, in the clearest sign yet that the government doesn't currently favour a takeover of the nation's No. 2 lender.

The statement comes days after Italian bank UniCredit announced it had swooped in to buy a 9% stake in Commerzbank to become its second largest shareholder, and its Chief Executive Andrea Orcel signaled his merger ambitions.

But UniCredit's move - a deal codenamed 'Flash' after Orcel's dog - took Berlin by surprise and triggered opposition from labor unions and a defense strategy from Commerzbank.

The German government, which still owns 12% of Commerzbank after selling 4.5% of its shares to UniCredit, would play a key role in whether any deal can take place.

However, over the past week labor unions and Commerzbank management have called on the government to hold off on any further share sales.

The Finance Agency, which is part of the German finance ministry and manages government holdings, said a committee meeting of government officials on Friday had decided it "will not, until further notice, sell any additional shares".

UniCredit declined to comment. A Commerzbank spokesperson said the bank had a strategy that works.

"Commerzbank is a stable and profitable institute. The bank's strategy is geared towards independence. The Federal government will accompany this until further notice by maintaining its shareholding," the agency said.

Orcel has said he wants to start talks on a merger he says would "create a much stronger competitor" in Germany. His gambit comes after years of calls for Europe to improve its banks' competitiveness in the face of larger U.S.