At stake is the government's goal of merging Mps with Banco Bpm as part of a long-envisioned plan to create a third Italian banking hub capable of competing with the big players Intesa Sanpaolo and UniCredit.
Banco Bpm CEO Giuseppe Castagna traveled to Rome in recent days to discuss the two M&A options available to the bank: a merger with Siena or the acquisition of Crédit Agricole's Italian arm.
The French institution, already Bpm's largest shareholder, could strengthen its position in the Italian market by integrating its local network. According to sources familiar with the negotiations, Agricole appears to have the upper hand, given that Mps is focused on integrating with Mediobanca.
Contrary to speculation, a possible merger between MPS and a "French" BPM at a later date is considered unrealistic, as it would only serve to expand Crédit Agricole's financial product distribution network, a key component of the bank's revenues, the source added.
Crédit Agricole is already a partner of BPM in consumer credit and insurance, and its strategy in Italy—its main foreign market—has always been geared toward protecting the distribution capacity of its products.
With UniCredit still perceived as a threat after its failed attempt to take over Piazza Meda, Castagna must find a solution that will protect the bank from new incursions.
If the banker reaches an agreement with Crédit Agricole that is acceptable to BPM shareholders, the government would find it difficult to oppose it, according to another source with direct knowledge of the situation.
However, Economy Minister Giancarlo Giorgetti said today that the Italian government will impose conditions on any alliance between Banco BPM and the Italian division of Agricole.
In the UniCredit case, it was the presence in Russia that provided the government with arguments to impose stringent conditions on the offer, which was later withdrawn, on BPM, invoking national security reasons under the powers of the 'golden power'.
IN SEARCH OF MEDIOBANCA'S NEW CEO
Following the resignation of Alberto Nagel, who had been in office since 2008, Lovaglio will now have to appoint a new CEO for Mediobanca. Amid fears of an uncertain future for the integration of two different businesses, the choice will be crucial to reassure the Milanese bank's staff and prevent an exodus of bankers and consultants.
Lovaglio, who has a background in commercial banking, has indicated the need for someone with expertise in investment banking. However, managing the sophisticated needs of Mediobanca's 'Ultra High Net Worth' clientele will be another key factor in the selection process, according to two informed sources.
(Italian version by Andrea Mandalà, edited by Gianluca Semeraro)
