FINANCIALS: Italy Clarifies Opposition To UniCredit/Banco BPM Merger
- Potentially credit negative for Banco BPM
República reports this morning that the Italian government setting UniCredit a very high bar in order to prove that a combination with Banco BPM is in the national interest.
UniCredit currently has a distribution agreement with Amundi to offer and manage savings products for the bank. Similar products at Banco BPM are offered by Anima. Should UniCredit combine with BPM, a very high percentage of Italian Savings would be managed in France, which the Italian government finds unpalatable. Note that Banco BPM made a tender offer for all Anima shares on Nov 6th, presumably in an effort to deepen ties between the two.
Moreover, the most likely buyer of Banco BPM brances that UniCredit is made to sell in any deal is Credit Agricole - already a 20% owner of Banco BPM - giving the French giant a foothold in Italy. More importantly for the Italian government, often forming the only competition to Intesa or UniCredit in several Italian towns.
Our read of this situation is that the Italian government is not set against a deal, but they have some strong opinions on the shape of a potential deal, which may have to involve either or both of:
- UniCredit offering savings products of an Italian company - mostly likely Anima
- A buyer - presumably Italian - being found for any Branches Banco BPM is made to divest
At the very least this complicates things. I would note that following a quick google, the first headlines I can find of a Banco BPM/UniCredit tie up date from two decades ago.
Banco BPM senior bonds are c.-25bps tighter QTD and Tier 2's are -75bps tighter, (vs c.-15bps and c.-24bps for Bank Snr and Tier 2 paper more broadly), political interference could weigh on Banco BPM spreads - although admittedly the quarter also contained a senior upgrade from S&P and strong results, which would have helped spreads, link below.
Link to the article - in Italian - below
Also a link to the Reuters article on the 3rd of December - https://www.reuters.com/markets/deals/italy-pm-says-ready-act-if-unicredit-bpm-tie-up-against-national-interest-2024-12-02/
Banco BPM Q3 results - https://marketnews.com/financials-banco-bpi-bamiim-baa2-bbb-bbb-q3-results-above-guidance