Credit Agricole Buys 9.2% Banco BPM Stake in Italian Push

(Bloomberg) -- Credit Agricole SA acquired a minority stake in Italy’s Banco BPM SpA, in a deal that may spark speculation it is aiming for a full takeover.

The French bank said late on Thursday it has built a 9.18% holding in Banco BPM. It’s not applied for authorization from regulators to increase its holding above 10%, according to a statement.

Consolidation of the Italian banking sector is quickening, prompting speculation that it could kick start long-awaited deals in the rest of Europe. Credit Agricole bought a minority stake in smaller Italian lender Credito Valtellinese SpA in 2018, paving the way for a full takeover two years later. 

Banco BPM gained as much as 12% in early Milan trading and was up more than 10% as of 9:19 a.m. local time.

“Credit Agricole aims at expanding the scope of strategic partnerships with Banco BPM,” the company said. The transaction “strengthens the solid relationship” with Italy’s third-biggest bank.

The Paris-based bank started its Italian expansion in 2007 when it bought local lender Cariparma, later growing in asset management, retail, corporate and investment banking. 

Banco BPM’s share price of 2.74 euros as of the market close on Thursday valued Credit Agricole’s stake at about 380 million euros ($412 million).

The Italian lender’s stock -- in common with peers -- has been impacted by negative sentiment toward banks since the beginning of the war in Ukraine and is little changed this year.

“In times like this it takes another bank, Credit Agricole, to remind us that real value should be based on fundamentals rather than fickle market momentum,” Alberto Cordara, an analyst at Bank of America, wrote in a note on Friday.

Italy’s banking sector consolidation shifted into higher gear after Intesa Sanpaolo SpA’s takeover of Unione di Banche Italiane SpA in 2020, followed by Credit Agricole’s Creval takeover and the more recent acquisition of troubled Banca Carige SpA by BPER Banca SpA. 

Banco BPM had been seen as a target of UniCredit SpA after talks to acquire bailed-out Banca Monte dei Paschi di Siena SpA collapsed in October.  

Credit Agricole’s stake purchase “hasn’t been previously agreed,” Banco BPM said in a separate statement on Thursday.

The French bank has an existing consumer finance joint venture with Banco BPM, called Agos Ducato. In 2018, the two lenders announced that they would consider the listing of the firm, allowing Banco BPM to reduce its 39% stake to as little as 10%.

Credit Agricole said the transaction is expected to have a negligible impact on its CET1 ratio, a key measure of tis financial strength.

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