Better a merger of equals but with a considerable load of problem loans or a merger with less non-performing loans but with an imbalance of values to the advantage of the contracting party? In the first case bpm, which in the risk of the Popolari, is coveted by all and represents the true tip of the balance, will choose to merge with the Banco Popolare while in the second he would marry Ubi.
Today the CEO of Banca Popolare di Milano, Joseph Chestnut, will update the bank's management board on the status of the negotiations which could soon reach their final stage.
La MY BAG shows that he is rooting for the marriage between Bpm and the Veronese Banco Popolare and it is no coincidence that the CEO of the Verona bank, Francesco Saviotti (formerly Comit like Castagna) said over the weekend: "We are ahead in the negotiations, but we need still time" and with reference to the merger projects with BPM he added: "We're not there yet but I'm convinced that we can get there".
The market capitalization of Bpm (almost 4 billion euros) and that of Banco Popolare (4,2 billion euros) is almost identical and this makes a "merger of equals" plausible even if Banco Popolare is larger than both Bpm in terms of total assets (123,3 billion against 49) and branches (1.780 against 706) and employees (17.512 against 7.750).
But the Veronese bank has a handicap, represented by the weight of non-performing loans (nearly 11 billion euros against 3,3 of the Bpm), and this is why it is willing to marry on a par with the Milanese bank and to acknowledge the leadership of management to the Milanese with the offer of the chair of CEO to Castagna, while the presidency would go to Carlo Fratta Pasini from Verona and the leadership of the executive committee to Saviotti.
On the other side of the scales there are instead the advances of Ubi to Bpm with the offer to the Milanese of the presidency for Piero Giarda (current president of the supervisory board of the Bpm) and the general management in Castagna but the leadership of the management in the hands of the current CEO of Ubi, Victor Massiah.
What still makes Bpm prefer the alliance with Banco Popolare is not a matter of armchairs, but the fear of actually being acquired by the major partner because on the UBI stock exchange it is worth 5 billion euros and has minus Banco Popolare's non-performing loans in addition to presenting assets of 115,7 billion, 1.555 branches and 17.745 employees. But the games aren't over yet.
