Italian banks announce merger
(24 March 2016 – Italy) Two Italian banks have consolidated to create the country’s third largest lender this week.
Banco Popolare has agreed to buy Banca Popolare di Milano Scarl in an all-stock, a combination that may prompt a wave of consolidation among the country’s many cooperative banks.
Banco Popolare investors will own 54 percent of the merger, the banks said in a joint statement. Banco Popolare will look to raise €1 billion (A$1.5 billion) from investors through a capital increase prior to finalisation of the deal.
The statement said the new banks will have a market value of about €5.7 billion, €171 billion of assets and more than 25,000 employees.
The European Central Bank (ECB) is increasing pressure on the country’s banks to tackle an estimated €360 billion bad and defaultedloans.
Daniele Nouy, chairman of the ECB’s supervisory arm, said “We want to make sure that the new entity is strong from the very beginning.”
Popolare di Milano Chief Executive Officer Giuseppe Castagna will oversee the combined company, while Banco Popolare Chairman Carlo Fratta Pasini will maintain the same role in the combined company, the banks said.
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