UniCredit is said to push for merger with SocGen: FT

[NEW YORK] Italian bank UniCredit SpA is considering a merger with France's Societe Generale SA, a move that would combine two of Europe's largest financial institutions, the Financial Times reported Sunday.

UniCredit chief executive Jean Pierre Mustier, who is French and once worked for SocGen, has been developing the idea for several months, the FT said, citing people close to the situation. SocGen directors have also been studying the possibility of a tie-up, the FT said.

Discussions over such a merger are at an early stage, and they may be challenged by Italy's recent political turmoil, the report said. That's already pushed back the potential timetable for a deal from an original plan of 18 months, the FT reported.

SocGen, France's second-biggest bank, has considered combining the entities over the past decade and a half, the FT said. The banks wouldn't be ready for a deal for at least another year, the FT said, citing bankers.

Milan-based UniCredit, Italy's largest bank by assets, last year considered a potential merger with Germany's Commerzbank AG. The subject of consolidation among Europe's biggest lenders has been a hot topic in recent months amid low interest rates and eroding profits.

In September, Mr Mustier told Bloomberg News that UniCredit had no major disposals or acquisitions in sight through 2019.

"Our plan is an organic plan, we are going to push and develop the activity on the purely organic basis up to the end of the plan," he said at the time. "And post-2019, all options are open and we see what are the best alternatives."

Societe Generale denied "any board discussion regarding a potential merger with UniCredit," in an email to Bloomberg on Monday. Calls and an email to UniCredit's representatives in Italy were unanswered outside office hours.

As of Friday, the banks had market capitalisations of 30.3 billion euros (S$47.25 billion) and 32.8 billion euros, respectively.

BLOOMBERG