Italy's government sees favourably UniCredit's efforts to build a large European banking group through a merger with Germany's Commerzbank (CBKG.DE) as long as the Milanese bank keeps its central functions in Italy, sources close to the matter said.
Italy's Treasury declined to comment.
UniCredit has emerged as the single largest private investor in Commerzbank after spending 1.5 billion euros ($1.7 billion) to buy 9% of the German rival.
Italy's second biggest bank will seek supervisory approval to potentially acquire up to 30% of Commerzbank, sources told Reuters on Wednesday, as it said it would explore a possible merger among other "value creating opportunities".
Rome's government has so far kept its distance from the move.
Speaking on condition of anonymity because the matter is sensitive, the sources told Reuters the government was not against UniCredit's move provided it did not entail a shift of central functions to Germany were a merger to take place.
UniCredit in 2005 bought Bavarian bank HVB. Albeit smaller in size than Commerzbank's, UniCredit's German business is more efficient and more profitable, providing scope for cost savings and a profit boost were the two entities to combine.
A previous attempt by former UniCredit CEO Jean Pierre Mustier to move on Commerzbank met with political opposition in Italy due to plans to create a German holding company to lead the bank's business there.
Italian politicians have traditionally looked with concern at cross-border mergers of their lenders due to the role they play in helping the Treasury to refinance the country’s nearly 3 trillion euro ($3.3 trillion) debt.
($1 = 0.8989 euros)
