Intesa-Ubi, operation sounds alarm for Italian banks


MILAN (Reuters) – The conquest of Ubi Banca by Intesa Sanpaolo has proved to be a shock wave destined to have profound repercussions on the Italian banking system.

The non-agreed offer, the largest banking operation in Europe in the last decade, could trigger further operations in a still fragmented sector that will have to deal with the losses caused by the pandemic, which add up to the difficulties existing in because of negative interest rates and the need to adapt to a rapidly changing digital world.

Analysts see a further push in the support to consolidation operations by the European Central Bank and the possibility offered to account for the badwill deriving from the gap between price and net book value as profit.

According to a banker who asks for anonymity “Intesa’s offer has inaugurated a new phase: now we know that hostile operations are not only possible but can also be successful”.

What is unclear is who will move.

By winning the healthiest average player, Intesa has eliminated the candidate bank to lead the consolidation among the medium-small institutions, those most threatened by the challenges facing the sector.

Yesterday Alberto Nagel, Mediobanca’s number one, Intesa’s chief financial adviser on Ubi, said that the talks are already intensifying in a context that sees CEOs striving to take a position in view of potential M&A scenarios.

Citi analysts predict a Rote of just 2% for Italian banks this year, with only “some signs of recovery” in 2021-2022.

“The Italian banking system must turn the page from profitability below the average of the last decade,” notes Marco Troiano, executive director of Scope Rating.


The most obvious candidate to take the initiative is Banco Bpm, the third Italian bank formed three years ago with the merger of Banca Popolare di Milano and Banco Popolare.

Rooted in a north where Intesa-Ubi’s dominance will make itself felt more and more, Banco Bpm, according to Reuters from sources close to the situation, is seen by the Italian Treasury as the possible buyer of the Monte dei Paschi di Siena, the eternal weak link in the banking system, 68% owned by the state.

Banco Bpm has repeatedly denied any interest in this matter. But bankers point out that his Lombard roots and cost cutting margins make him an attractive prey, even for the French Credit Agricole, credited with an interest in Ubi, or Bnp Paribas.

A source close to the situation reports that fears of French aims for Banco Bpm have alarmed some of the institute’s Italian shareholders, who would welcome marriage to UniCredit in a deal that replicates the Ubi-Intesa agreement.

A second source confirms the support for such a scenario by shareholder foundations.

But UniCredit, under the CEO Jean Pierre Mustier, in recent years has reduced exposure to Italy by also engaging in a strategy to lighten the BTP portfolio.

Mustier categorically excludes M&A but according to the first source, the bank’s strategy could change if the French banker, who had been nominated to lead HSBC this year, left after completing the bank’s relaunch.

The Intesa-Ubi deal is also intended to strengthen the role of Bper Banca, which is purchasing 532 branches from the new group to allow Intesa to obtain the green light from the antitrust authority.

Bper, supported by the main shareholder UnipolSai, was in negotiations for a merger with Ubi only a few weeks before Intesa presented the offer.

The CEO of Bper Alessandro Vandelli said that the group aims to play an active role in banking consolidation once it has integrated the branches purchased from Intesa.

No comment from the representatives of Banco Bpm, UniCredit, Credit Agricole and Bnp Paribas.

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(Translated by Gdansk editorial staff, Gianluca Semeraro, [email protected], +48587721396)


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