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Wednesday, Jan 15, 2025

Banco BPM Navigates French Ties as Unicredit Upholds Italian Heritage

Banco BPM Navigates French Ties as Unicredit Upholds Italian Heritage

Strategic alliances and investment maneuvers showcase a shifting European banking landscape.
Amid the intricate web of European banking manoeuvres, Banco BPM's recent focus has centered on its relationship with France's Crédit Agricole, hinting at evolving strategies in continental finance.

Official talks have yet to be confessedly underway, yet the leadership of Italy’s Banco BPM, led by Giuseppe Castagna, is exploring terms that could entice Crédit Agricole to back Banco in its prospective partnership with Monte dei Paschi di Siena (Mps), rather than succumbing to rival propositions from Unicredit, headquartered on Milan’s Piazza Gae Aulenti.

The dynamics shifted on December 6th when Crédit Agricole, already Banco BPM’s largest shareholder owning 9.9%, positioned themselves to increase that stake via derivative contracts, contingent on regulatory clearance from the European Central Bank (ECB).

This potential elevation to a 19.9% holding could transform the strategic balance in the ongoing narrative between the two Italian banks.

Publicly, Crédit Agricole maintains that its interest is not rooted in acquiring control but rather in safeguarding its current investments, intertwined as they are through joint ventures in consumer credit via Agos and in bancassurance.

Castagna hopes to leverage this intricate partnership to counter Unicredit's exchange offer, which the market has noted skeptically, as reflected in Banco BPM’s higher trading value at €8.12 per share compared to the €6.65 offered by Unicredit’s CEO, Andrea Orcel.

Unicredit is concurrently negotiating with Crédit Agricole’s asset management arm, Amundi, on a potential renewal of their significant 2017 partnership.

Should this potential renewal be successful, encompassing a decade-long period with broader geographical terms proposed by Orcel, it could fortify Unicredit’s strategic position within its Italian operations, indirectly steering Crédit Agricole’s decisions regarding Banco BPM.

Yet, potential regulatory intervention looms large.

Italy’s government could wield its 'golden power' policy to scrutinize foreign influence over national financial stability, specifically regarding Unicredit’s expansions.

In a recent LinkedIn post, Orcel emphasized Unicredit’s foundational ties to Italy, underscoring a commitment to fostering national growth and upholding the country’s role in the European banking framework.

He conveyed readiness to expand Unicredit’s share exchanges with Banco BPM to craft a more robust, competitive Italian banking giant.

These developments exhibit a broader European banking transformation, wherein national allegiances and cross-border partnerships compete in shaping the financial future, a future that remains tied to deep-rooted historical presences and evolving strategic cooperation.
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