FRANKFURT, Oct 7 (Reuters) - Commerzbank and

UniCredit did not discuss a merger at a recent

meeting, the German lender's CEO Bettina Orlopp told a local

newspaper, saying any tie-up with its Italian peer would result

in the loss of customers.

Orlopp, in her first interview since becoming CEO of

Germany's second-biggest lender by assets after Deutsche Bank

, was downbeat on the prospects for big bank mergers.

Italy's second-biggest lender after Sanpaolo Intesa

has been pressing for a tie-up while Commerzbank has been honing

its defence.

"Just because a merger looks good on paper does not mean it

will be executed well and can ultimately be successful and

create value for our shareholders," German newspaper

Handelsblatt cited Orlopp as saying in the interview published

on Monday.

Orlopp gave the interview days after meeting with UniCredit

CEO Andrea Orcel. She said the two did not discuss a merger at

what she described as a normal investor meeting.

Orlopp, who has expressed support for Commerzbank's strategy

of independence, told the newspaper that the German bank would

lose customers should the two lenders merge because there was a

lot of client overlap. She also said Commerzbank's credit rating

would decline.

UniCredit has amassed a 9% stake in Commerzbank and said it

planned to buy more shares if it received regulatory clearance.

It has also been pressing for discussions to explore a merger.

The approach represents the most significant attempt at a

pan-European bank merger. However, it faces political hurdles in

Germany ahead of national elections.

Chancellor Olaf Scholz as well as Commerzbank's management

and employees have all voiced opposition to a takeover. At least

one big investor and some business leaders favour talks.

Orcel, who has long held an interest in merging with

Commerzbank, said a tie-up would be the best outcome.