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Italy: Banco Popolare and Banca Popolare di Milano in merger talks

By  |  January 13, 2016

Italian banks Banco Popolare and Banca Popolare di Milano are in advanced talks to merge, raising the prospect that a consolidation of Italy’s mutual bank sector urged by regulators for 20 years may finally take place.

Concerns are especially acute regarding Banca Monte dei Paschi di Siena, Italy’s third-largest bank by assets, and smaller bank Carige, the two worst losers of 2014’s European bank health check which have acknowledged they cannot remain independent. Market regulator Consob banned short selling in both banks this week after sharp share price falls.

Italy’s government set the scene for consolidation of the popolari mutual banks more than a year ago, passing a law which forced the 10 largest banks — with assets worth about €500bn in tangible equity — to convert into joint stock companies by the end of 2016.

Full content: The Wall Street Journal

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