Milan, March 24th (AdnKronos) – BPM and Banco Popolare SIGN the Memorandum of Understanding creating the third-after Italian banking group Unicredit and Intesa Sanpaolo, with total assets of over 171 billion euro, 4 million customers, 2,500 branches with approximately 25 thousand employees, almost 120 billion in loans. After the go-ahead of the ECB and of the boards of two popular, Milan and Verona are expected to test the market -Yesterday both titles have been suspended on the Stock Exchange for the entire sitting- and the ‘verdict’ of the financial community who will be this morning presented the plan.
An integration that for Banco Popolare passes, before the merger, a capital increase from one billion. After over two months of intense negotiations, the official agreement late yesterday will lead to the birth of a giant with a retail vocation, which can count on a market share of over 8% (in terms of branches). A giant credit – with a total capitalization of 5.5 billion euro – with a strong presence in Lombardy (the group will be the first operator with a market share above 15%), Veneto and Piedmont.
The project numbers – The gross synergy will be in the order of 365 million per year, with a value creation estimated at some 1.9 billion. The costs of integration, one-off, will be about 435 million. The achievement of steady-state situation is expected by 2018. The BPM-Tour of the future (yet to decide on the new name) has a balance sheet strengthened, with a CET1 ratio pro forma fully loaded 13.6% and phased- in 13.7%.
the increase in the Bank’s capital – by May, Banco Popolare will decide whether to proceed with an increase in the rights issue or not (maybe in part by converting) however, it will be assisted by Mediobanca and-Bofa Merrill Lynch that will give the guarantee. In light of the capital strengthening, Verona will rise in the majority in the new reality weights: will count for 54% compared to 46% in Milan. The exact exchange ratios will be known only after due diligence.
The timing of the wedding – The timing, for what is the first merger between two popular after the government decree, are still long: by May it is expected the launch of the capital strengthening of Banco Popolare concluded at October, to hold meetings on the merger in November.
Governance – The governance system will see two headquarters, one in Verona (administrative seat) and one in Milan (headquarters). The management structure sees Carlo Fratta Pasini chairman, Giuseppe Castagna CEO, Maurizio Faroni general manager, Pier Francesco Saviotti Chairman of the Executive Committee. In addition, the BPM will express a deputy vice-president, on a board of directors to 19 members (to be reduced to 15 after three years), nine councilors will be expressed from Verona, seven from Milan (more to the Chestnut) and two independents.
Spin-off of the new BPM spa – it is also envisaged the unbundling and the conferral in favor of a bank that will be controlled by the parent company of some activities including the network of BPM branches and Banco in some historical provinces of Milan . The spa will be standalone BPM (for 3 years): use to operate a banking license Popolare di Mantova.
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