Tom Sims and Frank Siebelt

Frankfurt (Reuters) - Commerzbank boycotted a possible takeover of Italy's UniCredit, saying on Friday that net profit rose nearly 12% in the first quarter despite headwinds for the German economy.

Revenue lays the foundation for next week’s annual general meeting, when Commerzbank management will seek investor support to continue the independence strategy.

Commerzbank's results were helped by stronger than expected interest and commission income, while poor loans provisions were lower than expected.

Lenders' net profit for the quarter was 834 million euros ($936 million), higher than a €698 million consensus forecast published by Commerzbank. Net profit was 747 million euros in the previous year.

"We have achieved the highest quarterly profit since 2011, which shows that we can grow even during periods of economic challenges," Commerzbank CEO Bettina Orlopp said in a statement.

Stocks in medium-term trade rose 2.5%.

Unicredit shares are nearly 10%, making it the second largest shareholder of Commerzbank after the German government. Last year, it began pushing for potential pan-European bank mergers, shocking German companies and political institutions.

This interest quickly attracted the attention of employees as well as senior officials of business management and German government.

"We focus on our own independent strategy," Ollopp told analysts when briefing the revenues.

against the wind

Unicreit CEO Andrea Orcel's pursuit of Commerzbank has become Germany's determination to boycott foreign suitors and prevent its loss of one of the few large commercial banks remaining in its financial center in Frankfurt.

The German economy has been stagnating, but bankers and executives hope that spending by newly formed Prime Minister Friedrich Merz will help support the revival.

Commerzbank warned in a speech on Friday that the increase in U.S. tariffs “make it harder for German companies to access their most important export markets.”

U.S. central bankers warn that Germany could face some minor recession in 2025, which could damage banks' profits and lead to loan defaults for corporate clients.

Earlier this week, Germany's financial regulator Baffin said uncertainty would remain high.

Orcel said he would wait until the new German government was established before taking action. He said banks may have to wait until 2027 before they can make a final decision.

Last month, UniCredit received approval from German antitrust authorities to account for 30% of COMMERZBANK. It follows a similar green light from the European Central Bank earlier this year.