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Will Crédit Agricole take over Banco BPM?

Crédit Agricole’s purchase of a 9.18% in Banco BPM could have benefits, even if it doesn’t presage a full takeover.

Photo: Reuters

When Crédit Agricole SA announced on April 7 it had purchased a 9.18% stake in Banco BPM, Italy’s third biggest bank, it took care to mention that it had not asked the European Central Bank’s (ECB) permission to go above that level. Can we deduce from that fact that it does not intend to do so?

Some observers have naturally concluded that the stake presages a full takeover – firstly because Banco BPM has long been seen as a target. Its market cap is much lower than rivals, notably UniCredit but also compared with Crédit Agricole SA, which regards Italy as a second home market after France.

And neither UniCredit, based in Milan, nor Crédit Agricole have a market share in Italy sufficiently big enough to prevent them merging for competition reasons.

Crédit Agricole has made it clear that its move is supposed to be a friendly one

Secondly, this is seen in some quarters as a first step to a takeover, because that is what happened after Crédit Agricole bought an initial 5% stake in Credito Valtellinese (Creval) as part of a life insurance purchase and distribution agreement in 2018. Two years later, Crédit Agricole launched a bid for the entire bank.

Buying Banco BPM would be a different undertaking than the purchase of Creval. The latter was about a third of the size of Crédit Agricole Italia; Banco BPM would be twice as big. That difference in scale is more reason to test the waters with a smaller stake first, especially given lingering doubts about Banco BPM’s asset quality.


Even if Crédit Agricole doesn’t seek the ECB’s approval to buy Banco BPM, however, there could be benefits to owning this stake. Most importantly, there’s the matter of the French bank’s long-standing consumer-finance partnership with Banco BPM, an important part of its large European consumer finance business.

That partnership could be expanded to the other businesses for which Crédit Agricole seeks bank distribution across Europe, including insurance, asset management and most recently vehicle leasing. In addition, if UniCredit launches a bid for Banco BPM, that consumer finance partnership and other potential product-distribution opportunities could be at risk.

Until Russia’s invasion of Ukraine, speculation about a bid for Banco BPM by UniCredit had been growing since its chief executive Andrea Orcel backed out of talks with the government on a purchase of Banca Monte dei Paschi di Siena (MPS). Crédit Agricole SA chief executive Philippe Brassac, unlike Orcel, is not known for his involvement in big M&A deals.

Crédit Agricole has made it clear that its move is supposed to be a friendly one. “The transaction highlights Crédit Agricole’s very positive appreciation of Banco BPM’s intrinsic qualities: a solid franchise, positive financial perspectives and a strong and performing management team,” it announced. In other words, it wants Banco BPM’s management, including chief executive Giuseppe Castagna, to stay in place – unfettered, perhaps, by any other bank’s interests except for its own.

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