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 The reform aims to strengthen Italy's banking sector, which fared
the worst in a Europe-wide health check of lenders last year. The
government says it will also ultimately support bank lending to
businesses, which has been shrinking for the past three years as
Italy grappled with its longest post-war recession.
Its most immediate effect will be to spur a long-delayed
consolidation by making it easier for ownership of the so-called
"popolari" banks to change, bankers say.
They say the shake-up could also help find a buyer among the
cooperative banks for troubled Monte dei Paschi di Siena <BMPS.MI>
or Carige <CRGI.MI>, the two Italian lenders that emerged as the
weakest in the European checks.
"The measure has had the effect of an electric shock for the
popolari," Piero Giarda, chairman of the supervisory board of Banca
Popolare di Milano <PMII.MI>, told a shareholder meeting on
Saturday.
The bank is one of the 10 largest cooperative lenders affected by
the reform, which was approved by parliament last month and scraps
voting rules giving shareholders one vote each regardless of the
size of their stake.
The others are UBI <UBI.MI>, Banco Popolare <BAPO.MI>, Popolare
dell'Emilia Romagna <EMII.MI>, Popolare di Vicenza, Veneto Banca,
Popolare di Sondrio <BPSI.MI>, Credito Valtellinese <PCVI.MI>,
Popolare di Bari, Popolare dell'Etruria e del Lazio <PEL.MI>.
Talks over possible tie-ups have already started, at least
informally.
"We are talking to the cooperative bank world that has the same
problems as us," Banco Popolare Chairman Carlo Fratta Pasini told
shareholders.
"We're not looking to take over anyone, there are no predators and
preys, we're just trying to find out whether there are traveling
companions."
Critics of the "one-head, one-vote" rule say it, together with
ownership restrictions and limits on proxy voting, have distorted
governance at the banks by allowing minority shareholders to block
unwanted change.
The rules have also long been seen as an obstacle to mergers and to
attracting new investors.
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The expected wave of consolidation will help banks shoulder rising
costs as regulators push lenders to increase their loss-absorbing
capital, popolari executives say. Some also see domestic tie-ups as
a defensive move against possible foreign takeovers.
"Looking for a partner, listed or not listed, is the most logical
and safest solution for our future," said Gianni Zonin, chairman of
unlisted Popolare di Vicenza. He said he hoped regional rival Veneto
Banca "accepts this invitation."
Both lenders have hired investment banks to advise them on strategic
options. They have also written down the value of their shares by 23
percent in an unusual move that is seen as smoothing the way for a
possible tie-up.
Monte dei Paschi, which is due to carry out a 3-billion euro rights
issue to plug a capital shortfall laid bare by last year's review,
said on Friday it had been told by the European Central Bank it also
needs to find a merger partner. Bankers say UBI would be the most
likely domestic candidate to take over the Tuscan bank.
Another combination under consideration is between Popolare Milano
and Banco Popolare, and possibly also with Popolare Emilia Romagna,
according to a source close to the matter. The CEO of Banco Popolare
has said Popolare Milano would be his ideal merger candidate. The
Milan-based bank declined to comment.
(additional reporting by Gianluca Semeraro in Novara, Andrea Mandala
in Milan. Editing by Jane Merriman)
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