The merger of Banco Popolare and BPM will create the third largest bank in Italy – Investing.com Spain

MILAN (Reuters) – Banco Popolare (MI and Banca Popolare di Milano (BPM) on Wednesday agreed to merge and create the third largest bank in Italy.

As part of this transaction, Banco Popolare 1,000 million capital increase euros, said the two entities in a joint press release.

the new entity will be based in Milan and Verona.

with the integration will be born a bank with total assets of 171.000 billion euros and 25,000 employees, the third Italian bank behind Intesa Sanpaolo (MI and Unicredit (MI).

BPM shareholders will have 54 percent of the new entity and the owners of Banco Popolare 46 percent

the two banks still have to submit a business plan within a month.

the integration will still require a green light from shareholders and is expected to close the transaction until December.

Giuseppe Castagna, CEO of BPM, is the head of the new entity.

According to a source familiar with the situation, the European Central Bank (ECB) and would have given the green light the merger.

the merger of BPM with Banco Popolare could be a catalyst for other consolidation in the fragmented Italian banking sector to offset declining margins and absorb the effect of ultra-low rates.

The two entities had held merger talks for several months. But in the final stretch some obstacles emerged, including the treatment of doubtful loans. The European banking supervisor had demanded a strong capital base and improved asset. But the two banks initially ruled out a capital increase

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