Net income in the period increased 24% to €3.26 billion (US$3.6 billion) in the third quarter, the bank said in a statement Monday. That was higher than all estimates.

UniCredit also upgraded its full-year profit guidance before extraordinary charges to “well above” €11.5 billion from more than €11 billion and increased the planned interim dividend to €4.5 billion.

The Italian lender has won European Central Bank approval to raise its stake in Commerzbank above 30% and potentially to as much as 100% after a two-year pursuit that has met resistance in Germany. 

UniCredit expects the outstanding regulatory processes to be completed late November, after which it would control close to 50% of Commerzbank’s voting rights. That would effectively give UniCredit control at shareholder meetings and allow Orcel to steer key decisions at the German lender.

The Milan-based bank said in the statement that new governance arrangements and the kick-off of “Commerzbank Unlocked” strategy are expected to be announced by the first quarter.

Orcel has indicated he intends to replace large parts of Commerzbank’s supervisory board and subsequently its top management, including chief executive officer Bettina Orlopp. The executive has also outlined thousands of potential job cuts and a substantial reduction in Commerzbank’s international offices.

Last week, the Frankfurt-based bank lowered its full-year outlook for income from lending amid intensifying competition for deposits. Orlopp struck a more conciliatory tone towards UniCredit during the earnings presentation, saying the two banks could work together on procurement, overlaps in their international networks and shared product platforms to generate savings and support revenue growth.

Germany, which owns about 13% of Commerzbank, is seeking commitments on jobs, lending to small and medium-sized companies, the bank’s Frankfurt headquarters and the preservation of its stock-market listing.

UniCredit also said that a combination with HypoVereinsbank, its existing German unit known as HVB, could unlock “substantial additional value and potentially earlier than expected.”

UniCredit profit was driven by higher revenue and lower costs.

“We have fundamentally transformed the way UniCredit operates, combining sustainable profitable growth with structural cost efficiency, disciplined capital allocation and a strong balance sheet,” Orcel said. 

Revenue in the third quarter rose 12% from a year earlier, helped by higher income from lending, fees and dividends, while costs declined more than 1%. 

The bank’s CET1 ratio rose to 15% at the end of September.

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