On the large table where the game of bank risk, the Italian team's move to Germany leaves other teams uncertain about their next strategies both in Europe, both in Italy. But analysts now see the accentuation of the M&A operations, with the blessing of the supervisory authorities. The cases in Europe and the spotlight on Banco Bpm and Mps.
Unicredit: Orcel now interested in a merger with Commerzbank
Unicredit he will have to do something for a while Germany to metabolise, even with the very aggressive German unions, after the purchase of 9% di Commerzbank, with the possibility of increasing the quota. Not only that. Andrea Orcel, CEO of UniCredit, told Bloomberg TV this morning that, under the right conditions, he was interested in buying the remaining 12% of Commerzbank owned by the German government, and even a fusion. THE Commerzbank shares rose this morning by more than 3% after yesterday's surge of more than 16%. Also the UniCredit title rose 2,81%. JPMorgan analysts expect a UniCredit's profit increase thanks to a deal that would transform its business in Germany from regional to national, with a strong focus on the country's small and medium-sized businesses.
Now other M&A hypotheses are unleashed, with the blessing of the European supervisory authorities
“We expect a greater flow of mergers and acquisitions news of European banks going forward, which could be positive for bank valuations that have historically been considered target,” JPMorgan analysts, including Kian Abouhossein, said in a note to clients today. “We do not think mergers and acquisitions in Italy are completely out of the question and, depending on the performance of the stock price, could still represent a potential alternative to the acquisition of Commerzbank,” they added.
Le supervisory authorities in Europe have long supported the idea of greater alliances, both within and between countries, because a smaller number of stronger credit institutions should give boost to the economy and enable euro area banks to perform better than their larger competitors in the United States and Asia. The concentration of the banking sector, measured by the share of banking activities held by the five largest banks, varies significantly across the European Union. ECB data show that the fragmentation is much higher in some euro area countries, especially in the larger and richer economies such as France e Germany. In the latter in particular there are hundreds of banks alongside the two large listed credit institutions, Deutsche Bank e Commerzbank precisely. At the other end of the range there are Greece, Cyprus and the Baltic States. In Spain, where the 69% share of banking assets held by the top five lenders is close to the eurozone average, the number of banks has fallen to 10 from 55 before the global financial crisis.
Obstacles to cross-border marriages
- obstacles cross-border agreements are still numerous and include regulations and laws on work different, the lack of a system of Deposit insurance for the entire eurozone and politics. Banking executives have also repeatedly stressed that without aeuropean banking union, which would allow creditors to move assets freely, cross-border deals are unlikely.
UniCredit’s move to acquire all of Commerzbank should overcome these hurdles, given the Italian bank’s presence in Germany through its ownership of HVB.
So far, mergers have been dictated by the emergency
The recent important ones so far Bank mergers in Europe have mostly been agreed in emergency situations. Last year UBS has bought Credit Suisse after the Swiss government orchestrated a deal to protect the entire financial system. Then there's the €12,23 billion hostile move by BBVA for Sabadell which, if successful, would rank as one of the largest European banking operations of the last 15 years.
In Italy everything depends on the game
For a long time, many Italian banks have felt the spotlight on them, seen as potential prey in the Italian banking game. Ps a BancoBpm, Popular Sondrio a Bper, Up to Unipol, without counting Mediobanca e Generali: all have been the subject of hypotheses of interest by Unicredit. After all, with a market capitalization of 58 billion, 10 billion of expected organic capital generation in a year (about 60% of Commerzbank), and a “buffer” of over 350 basis points of additional capital created internally every 12 months, UniCredit has the firepower to pull off even more than one large deal.
Some securities on the stock exchange yesterday they initially lost ground but then recovered: among these Mediobanca (today at 14,85 euros, up 1,16%, after a low yesterday after the news at 14,61 euros) and Bpm bank, yesterday down to 5,67 euros and today up to 5,97 euros (+3,11%) while Ps which today is at 4,96 euros (+1,51%, yesterday it marked a minimum at 4,82 euros.
For Jp Moragan the Bpm bank remains an attractive candidate for acquisition by Agricultural Credit. The latter already holds a 9% stake in Banco BPM and has a history of proactive acquisitions in the Italian banking sector, including the purchase of three small Italian banks in 2017 and Creval in 2021. In 2022, Orcel was about to launch a takeover bid on Banco Bpm, but then the project, also due to Moscow's invasion of Ukraine, vanished. Also on Banca Popolare di Sondrio UniCredit had its eyes set on it, but found its way blocked by the shareholder Unipol led by Carlo Cimbri.
Monte Paschi the linchpin of the game
But the biggest issue, from which Unicredit seems to have actually withdrawn at least for the moment, is that of Montepaschi di Siena. The Italian government, according to the commitments made with Brussels, should exit the capital within the year, even if extensions to 2025 are hypothesized.
Se Intesa Sanpaolo is out of the game because limits have been reached Antitrust, the CEO of BancoBpm, Giuseppe Castagna has made it clear several times that he wants to continue on his own, in order to give more value to his shareholders. On the field, then, there remains Unipol, whose president Cimbri, without closing the door to an operation with the Ministry of Economy and Finance, has however cooled the hypothesis of operations postponing them to better times. MPS has in place a bancassurance partnership with Axa, which must be repurchased in view of new entries. The same subsidiary Bper, with the new CEO Gianni Franco Papa, will present the new industrial plan on October 10, which will be "based on organic growth". Across the Alps there is still the Credit Agricole, which had previously opened the dossier, only to then close it again. “We believe that the Unicredit-Commerzbank operation could push for domestic consolidation involving Mps and other peers” says Intermonte. “The repurchase of the insurance joint venture with Axa, instead, could open the doors to a partnership with Unipol, potentially laying the foundations for a consolidation involving Unipol itself, Bper , Popular Sondrio”.
