Italy's second-largest bank UniCredit announced on Thursday that it had entered into
“exclusive negotiations
” with the government to buy a stake in Banca Monte dei Paschi di Siena (BMPS), which benefited from a public bailout in 2017.
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The two parties
"have approved the conditions precedent to a potential transaction involving BMPS 'business operations
,
"
UniCredit said in a statement. The Italian Ministry of the Economy is seeking to find a buyer for the 64% stake it holds in BMPS, in accordance with the demands of the European Central Bank. Considered to be the weak link in the Italian banking system, BMPS had at the time benefited from a recapitalization of 5.4 billion euros from the State. Exclusive negotiations
"will now begin to assess the feasibility of a transaction"
, covering
"a carefully defined scope"
of BMPS and "
measures to mitigate risks"
for UniCredit.
3.9 million additional customers
Such a transaction would allow UniCredit to
"accelerate its organic growth plans"
: BMPS could bring in around 3.9 million customers, 80 billion euros in customer loans and 62 billion euros in assets under management. , according to the press release.
Among the conditions negotiated by UniCredit are the removal of
“all disputes unrelated to ordinary banking activity and all potential legal risks”
and the
“exclusion of bad debts”
of BMPS from the transaction.
BMPS back in the green
BMPS, which is due to publish its financial results next Thursday, announced in May that it had returned to the green in the first quarter. After having chained five consecutive quarterly losses, it was able to post a net profit of 119.3 million euros. Over the whole of 2020, BMPS had widened its net loss to 1.689 billion euros, against 1.03 billion the previous year. Its capital ratio (CET1), an index closely followed by analysts because it measures the ability to cope with crises, increased slightly, to 12.2%, against 12.1% at the end of December.
