Outcome of Italy’s bank M&A wave to be decided by investors: central bank
INVESTORS will ultimately determine the outcome of a raft of takeover bids rocking Italy’s financial sector, the country’s central banker said, adding that supervisors only assessed the soundness of the entity resulting from the various tie-ups.
In the text of a speech prepared for Italy’s annual Assiom-Forex financial conference, central bank governor Fabio Panetta said that the mergers and acquisitions (M&A) wave could help Italy narrow the gap with other European countries in terms of its banks’ size.
On average, the total assets of Italy’s top five banks are four times lower than those of their French counterparts and one and a half times lower than those of Spanish and German banks.
“While scale in banking generally brings both advantages and some well-known challenges, these transactions can be seen within the broader perspective of the European market’s integration and consolidation,” Panetta said.
Italy’s No 2 bank UniCredit has bid for smaller rival Banco BPM, which in turn is trying to buy fund manager Anima Holding. State-backed Monte dei Paschi di Siena has bid for Mediobanca and BPER Banca for Popolare di Sondrio.
UniCredit has also built a 28 per cent stake in Germany’s Commerzbank, contingent on supervisory approval, and said it could pursue a full takeover.
Panetta said supervisors checked whether the transactions created “a viable, efficient” bank that could operate “in accordance with the principles of sound and prudent management, serving the real economy without compromising financial stability”.
“Subject to these criteria, the outcome of M&A transactions is ultimately determined by market dynamics and shareholder decisions,” he said.
The wave of deals is fuelled by cash in excess of capital thresholds banks have accumulated, and the need to achieve cost cuts now that falling rates will begin to hurt lending margins, Panetta said.
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