Banco Popo­lare, BPM to be­come Italy's No 3 bank

The Pak Banker - - COMPANIES/BOSS -

Ital­ian banks Banco Popo­lare and Banca Popo­lare di Mi­lano an­nounced they would merge, in a long-awaited deal that will cre­ate the coun­try's third-largest bank by as­sets.

The deal will cre­ate a lender with more than 25,000 staff and four mil­lion cus­tomers, and could help drive con­sol­i­da­tion among Italy's frag­mented bank­ing sec­tor. The deal has been de­layed as the banks strug­gle to meet higher cap­i­tal re­quire­ments, weighed down by hun­dreds of bil­lions of euros of bad loans and weak eco­nomic growth.

Banco Popo­lare, which will own 54 per­cent of the new com­pany, is seek­ing to raise one bil­lion euros ($1.1 bil­lion) of cap­i­tal be­fore the merger is com­pleted by De­cem­ber, me­dia re­ported. "We are par­tic­u­larly pleased to have suc­ceeded... given the se­vere and neg­a­tive mar- ket con­di­tions, in launch­ing an op­er­a­tion as ex­tra­or­di­nary and sig­nif­i­cant as the merger of Banco Popo­lare and Banca Popo­lare di Mi­lano," said Banco Popo­lare pres­i­dent Carlo Fratta Pasini.

The as-yet-un­named lender will have two head­quar­ters -- the le­gal side headed from Mi­lan and ad­min­is­tra­tive side in Verona.

With a mar­ket cap­i­tal­i­sa­tion of around 5.5 bil­lion euros, 171 bil­lion euros in as­sets and 2,500 branches, it will be Italy's num­ber three lender be­hind In­tesa San­paolo and UniCredit. The Euro­pean Cen­tral Bank has been pil­ing pres­sure on Italy's banks to deal with their weak bal­ance sheets, and the head of its su­per­vi­sory arm on Tues­day said the merger must suc­ceed.

"The bank has to be strong at the very be­gin­ning, this will be the third Ital­ian bank, said Daniele Nouy, pres­i­dent of the ECB's Su­per­vi­sory Coun­cil.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.