Banco Popolare, BPM to meet ECB officials for merger
Italian banks Banco Popolare SC and Banca Popolare di Milano Scarl have reached agreement on a merger plan, and their chief executive officers will meet with European Central Bank officials Wednesday to seek approval, two people with knowledge of the matter said.
The combination would create the country's third-largest lender and may prompt more deals among the Italy's many cooperative banks. The government is pressing for consolidation of the so-called popolari to spur lending and help the country recover from a three-year recession.
Pier Francesco Saviotti of Banco Popolare and Giuseppe Castagna of Popolare Milano have reached agreement on the structure of the deal and will meet officials of the ECB's bank oversight arm to seek approval to pursue it, said the people, who declined to be identified because the talks aren't public.
Castagna will oversee the combined company, while Saviotti will become the chairman of the executive committee, people have said. Banco Popolare Chairman Carlo Fratta Pasini will continue in that role, the people said. The merger would be the first deal since the approval a year ago of a law forcing Italy's biggest cooperatives to become joint-stock companies. Restrictions on ownership and voting rights for these community-oriented banks have long stood in the way of consolidation.
Saviotti has repeatedly said his bank was in advanced talks to combine with Banco Popolare. Castagna said Jan. 30 that they might reach an agreement in February, while leaving open the option of talks with competitor Unione di Banche Italiane SpA.
The merger would create a lender with about 245 billion euros ($276 billion) in assets. Only UniCredit SpA and Intesa Sanpaolo SpA are larger. The news was earlier reported by Il Sole 24 Ore.