Crédit Agricole Strengthens Stake in Banco BPM Amid Italian Banking Reshuffle

Banco BPM’s shares soared on Monday following an announcement from French banking giant Crédit Agricole that it plans to increase its stake in the Italian lender. The announcement, made late last week, sent Banco BPM’s stock climbing over 2% in early trading, marking its most significant rise since January 2016.

Crédit Agricole revealed that it had initiated steps to boost its ownership in Banco BPM from 9.9% to 15.1%, pending approval from Italian regulators. Despite this move, the French bank clarified that it had no intention of launching a tender offer for additional Banco BPM shares, signaling that a full-scale takeover was not part of its immediate plans. Crédit Agricole, which is already Banco BPM’s largest shareholder, framed the stake increase as part of its long-term investment and partnership strategy.

In a statement, Crédit Agricole emphasized that the decision aligns with its broader industrial partnerships in consumer finance and various insurance segments. It also highlighted Banco BPM’s strong business model and promising financial outlook as key motivators for the investment.

The news from Crédit Agricole follows a $10.6 billion bid by Italian bank UniCredit to acquire Banco BPM last month, which Banco BPM firmly rejected. The Italian bank argued that UniCredit’s offer undervalued the company and raised concerns about potential job losses, reduced competition in Italy’s banking sector, and exposure to risks stemming from UniCredit’s growing presence in Germany. Notably, UniCredit has been expanding its stake in Germany’s Commerzbank, a move that has faced pushback from German authorities. The Italian government has also indicated it could block a UniCredit takeover if deemed contrary to national interests.

Conversely, the Meloni government has reportedly given its informal approval for Crédit Agricole’s plans to increase its stake, according to sources cited by Reuters.

In addition to fending off acquisition bids, Banco BPM has been pursuing its own growth strategies. In November, the Italian bank launched a bid to acquire asset manager Anima Holding to diversify its revenue sources amid falling interest rates. Speculation also persists about a potential merger between Banco BPM and Monte dei Paschi di Siena (MPS), after Banco BPM acquired a 5% stake in MPS. Such a merger could position the combined entity to challenge Italy’s banking heavyweights, UniCredit and Intesa Sanpaolo.

Reacting to Crédit Agricole’s announcement, UniCredit stated that it does not alter the bank’s strategic plans. A UniCredit spokesperson reiterated this stance in a LinkedIn post last week. Meanwhile, by mid-day trading on Monday, UniCredit’s shares were down 0.83%, while Crédit Agricole’s shares had edged up 0.77%.

As the dynamics within Italy’s banking sector continue to evolve, Crédit Agricole’s increased stake in Banco BPM underscores its commitment to strengthening ties with the Italian lender and navigating the competitive landscape of European banking.

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