Banco Popolare SC said it’s in advanced merger talks with Banca Popolare di Milano Scarl, confirming mounting speculation that the two Italian lenders may combine.
“We are not there yet, but I believe it is possible to arrive at a marriage,” Banco Popolare Chief Executive Officer Pier Francesco Saviotti said on Friday, according to a report by Italian newspaper Il Messaggero. A Banco Popolare spokesman confirmed that Saviotti made the comment.
The two Italian cooperative banks are seeking a preliminary agreement by mid-February, people with knowledge of their plans said earlier this week. The banks are working on a deal that would leave the top job to Giuseppe Castagna, the current CEO of Popolare di Milano, while Saviotti would become chairman of the executive committee of the combined entity, the people said.
The two lenders are among Italy’s cooperative lenders, known as popolari, that are considering tie-ups as new rules force them to give investors voting rights that reflect the size of their shareholdings. A law adopted in March requires popolari lenders with assets of at least 8 billion euros ($8.7 billion) to abolish restrictions on ownership and voting rights, which have been obstacles to consolidation among Italy’s community-oriented banks.