Two mergers: one between Ubi and Creval and one between Pop Emilia and Pop Milano. This, according to Mediobanca Securities, is the ideal combination in a possible second wave of M&A in the world of cooperative banks. The scenario, according to the study, would lead to a growth in EPS for both estimated at 34% in 2016.
The sector is at the center of the market's attention, on the one hand due to fears of recapitalization and the results of the ECB's asset quality review, and on the other due to the more speculative aspects linked to possible evolutions in terms of governance and mergers.
According to the broker, mergers between large cooperative banks are unlikely in the short term as in the first phase of the M&A the protagonists would be small institutions such as Banca Etruria and Veneto Banca, the first targets of the Bank of Italy's moral suasion.
In the latter cases, according to Mediobanca analysts, the expected mergers with a large popular company would be of little significance in changing the scenario of the entire sector. Furthermore, in the case of Banca Etruria no important synergies would be created, while in the case of Veneto Banca there could be negative impacts on the capital requirements of the combined entity.
However, possible deals around these two banks could have a cascading effect across the entire sector by stimulating similar deals in the medium term with a greater impact in the sector. “In general terms, we consider a consolidation possible in the medium term, but we are also aware of the fact that the road is unlikely to be downhill”, comments Mediobanca.
