Unipol CEO Carlo Cimbri said in an interview with Il Sole 24 Ore daily the idea of combining mid-sized Banco BPM and BPER to create a group with 300 billion euros ($356 billion) in assets, rooted in wealthy northern Italy, was “fascinating.”
“It would have sizeable market share in the country’s most productive areas and extremely significant economies of scale,” Cimbri said.
With its 19% stake, Unipol is BPER’s single largest investor.
Intesa Sanpaolo’s ISP.MI surprise takeover of UBI this year has prompted rivals to study alternative deals.
“Media say Banco BPM is studying options. Were it to prioritise this idea, I think BPER couldn’t but analyse it with great attention,” Cimbri said.
“A project that creates value and is consistent with shareholders’ interests would have their backing and that of the market,” he added.
BPER shares were up 3.6% by 1034 GMT, Banco BPM gained 4%.
Broker Equita said BPER-Banco would have 13.6% of the domestic market in terms of branches, behind Intesa’s 19% and ahead of UniCredit’s CRDI.MI 11%.
Unipol has already steered BPER on to an expansion path by backing the acquisition of branches and assets from the Intesa-UBI group.
The BPER deal, which was engineered with the help of Mediobanca MDBI.MI, allowed Intesa to overcome major antitrust opposition to the UBI takeover.
Backed by Unipol, BPER has just raised 800 million euros in capital to fund the acquisition.
BPER has said it will consider further M&A once it has integrated the new business, while Banco BPM is actively looking for a partner.
Banco BPM had widened ongoing commercial discussions with Credit Agricole CAGR.PA to assess a potential merger but talks have stalled, sources have said.
A merger deal between Banco BPM and BPER collapsed at the last minute in 2007 but a tie-up has since remained a possibility.
In a further catalyst for potential deals, the Treasury is looking for a buyer for Monte dei Paschi BMPS.MI, in which Italy owns a 68% stake after a 2017 bailout.
Sources have said the Treasury has considered both Banco BPM and BPER as potential candidates, but Monte dei Paschi has failed to elicit any interest so far.
Rome is now working on a package of incentives to entice buyers and has been focusing on UniCredit as the preferred partner.
“Banco BPM is a much better deal than Monte dei Paschi. BPER is busy with those Intesa branches, but Cimbri knows that now may be the time to act,” an Italian banker said requesting anonymity.
Additional reporting by Giuseppe Fonte in Rome; editing by Agnieszka Flak and Jane Merriman