Intesa May Consider Small Deals in Wealth Management Sector

Intesa Sanpaolo SpA, Italy’s biggest lender, may consider small acquisitions in wealth management and private banking in Europe to strengthen some of its core activities.

Milan-based Intesa could consider buying “boutique” operators, small players or teams of private bankers in locations where there are “a lot of Italians,” for example, Switzerland, Chief Executive Officer Carlo Messina said Monday in an interview with Bloomberg Television’s Francine Lacqua.

While wealth management offers “a lot of potential,” the CEO ruled out a big acquisition as potential deal prices currently look too high to generate adequate synergies.

Messina is seeking to expand the bank’s more lucrative businesses including insurance, private banking and asset management to counter low margins from lending, while focusing on integrating UBI Banca SpA, the smaller rival it bought last year.

Intesa is also accelerating the cleanup of its balance sheet and improving asset quality by deploying a gain from its purchase of UBI. The lender on Friday announced full-year net income excluding UBI of 3.2 billion euros ($3.9 billion), in line with estimates and above its own target.

Intesa Strengthens Finances by Using Gain From UBI Purchase

Intesa vs. UniCredit

Italian rival UniCredit SpA’s business model is completely different than Intesa’s, Messina noted, calling his firm a “wealth management and protection company” that directly owns units that create asset management and insurance products. UniCredit, also based in Milan, “is more of a pan-European bank,” Messina said.

Commenting on UniCredit’s possible purchase of bailed-out lender Banca Monte dei Paschi di Siena SpA, Messina said the move could help Intesa’s rival expand its role in Italy over the medium term. Still, “in the short term Intesa can increase its market share in Italy even if UniCredit merges with Monte dei Paschi,” Messina said.

A new government led by former European Central bank chief Mario Draghi may accelerate growth and narrow Italy’s spread against German debt, with positive effects for the country, the region and for the banking industry, Messina said in the interview.

©2021 Bloomberg L.P.

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