Agricultural credit could soon expand its scope. The bank verte and the Italian bank Banco BPM “have signed a confidentiality agreement with a view to formal discussions on a possible merger”, according to the Italian daily Il Messaggero. Banco BMP is open to discussions with all potential partners about a merger, a source close to the establishment confirmed to hooly News. This source indicated that in-depth contacts were currently underway with the French bank regarding their partnership in the field of consumer credit, Agos. Regarding a possible merger, the third Italian bank “is evaluating any option”, said this source.
UBS confirmed at the beginning of October its Buy recommendation and its target price of 10.30 euros on the shares Agricultural credit SA (CASA). Crédit Agricole Italia achieved a net profit of 645 million euros in 2019, or 12% of the net profit of the green bank, recalls UBS. In the Banco BPM takeover scenario, Crédit Agricole’s exposure to Italy would increase sharply, with the target approximately twice the size of Cariparma (Crédit Agricole Italia). Such a deal would have a positive impact of 6% on earnings per share by 2023, ignoring revenue synergies, according to UBS. Or even more, given CASA’s know-how in cross-selling.
Banco BPM open to the idea of a merger
“According to the first summary analyzes, Banco BPM could represent 55% -60% of the combined activity which would emerge after an exchange offer”, according to Il Messaggero. At the beginning of October, the French bank had indicated in a press release that “for years, exchanges have been frequent between Crédit Agricole and BPM, within the framework of the partnership and the JV (joint venture, Editor’s note) with Banco BPM, Agos, in the field consumer credit “.
In an interview with the business daily Il Sole 24 Ore, Banco BPM boss Giuseppe Castagna said in August that the Intesa-Ubi merger had “changed the competitive environment for all other Italian banks”, and that Banco BPM “was looking around for understand if it was possible to achieve a merger creating value “.
What does technical analysis say?
While waiting for the possible Italian campaign of the French bank, the Crédit Agricole action, in very strong drop this Thursday, returned to critical support levels, having recently failed to breach (close) the descending 20-session moving average. The title is testing the support area of 7.08-7.16 euros. A lower closing of this last level would risk prolonging the bearish movement. And the configuration of the Bollinger Bands (volatility gauge) is currently dangerous.
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