FINANCIALS: Italy Clarifies Opposition To UniCredit/Banco BPM Merger
- Potentially credit negative for Banco BPM
República reports this morning that the Italian government setting UniCredit a very high bar in order to prove that a combination with Banco BPM is in the national interest.
UniCredit currently has a distribution agreement with Amundi to offer and manage savings products for the bank. Similar products at Banco BPM are offered by Anima. Should UniCredit combine with BPM, a very high percentage of Italian Savings would be managed in France, which the Italian government finds unpalatable. Note that Banco BPM made a tender offer for all Anima shares on Nov 6th, presumably in an effort to deepen ties between the two.
Moreover, the most likely buyer of Banco BPM brances that UniCredit is made to sell in any deal is Credit Agricole - already a 20% owner of Banco BPM - giving the French giant a foothold in Italy. More importantly for the Italian government, often forming the only competition to Intesa or UniCredit in several Italian towns.
Our read of this situation is that the Italian government is not set against a deal, but they have some strong opinions on the shape of a potential deal, which may have to involve either or both of:
- UniCredit offering savings products of an Italian company - mostly likely Anima
- A buyer - presumably Italian - being found for any Branches Banco BPM is made to divest
At the very least this complicates things. I would note that following a quick google, the first headlines I can find of a Banco BPM/UniCredit tie up date from two decades ago.
Banco BPM senior bonds are c.-25bps tighter QTD and Tier 2's are -75bps tighter, (vs c.-15bps and c.-24bps for Bank Snr and Tier 2 paper more broadly), political interference could weigh on Banco BPM spreads - although admittedly the quarter also contained a senior upgrade from S&P and strong results, which would have helped spreads, link below.
Link to the article - in Italian - below
Also a link to the Reuters article on the 3rd of December - https://www.reuters.com/markets/deals/italy-pm-says-ready-act-if-unicredit-bpm-tie-up-against-national-interest-2024-12-02/
Banco BPM Q3 results - https://marketnews.com/financials-banco-bpi-bamiim-baa2-bbb-bbb-q3-results-above-guidance
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE 3-YEAR TECHS: (Z4) Bounce Mode
- RES 3: 96.380 - High Mar 21 2023
- RES 2: 97.190 - High May 5 2023
- RES 1: 96.730/932 - High Sep 17 / 76.4% of Mar-Nov ‘23 bear leg
- PRICE: 96.090 @ 15:41 GMT Nov 29
- SUP 1: 95.760 - Low Nov 13
- SUP 2: 95.750 - Low 27 Nov ‘23
- SUP 3: 95.480 - Low Jan 11 2023 and a major support
Having hit a fresh pullback low at 95.760 across the global rates sell-off in recent weeks, the market found bottom and has staged a shallow bounce above the 96.00 handle. Nonetheless, recent weakness confirms the downside bias, with support undercutting at 95.750 below ahead of major support of 95.480. For any corrective recovery to take hold, markets need to retake the 96.00 handle on a closing basis.
USDCAD TECHS: Pullback Appears Corrective
- RES 4: 1.4287 2.0% 10-dma envelope
- RES 3: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4196 1.764 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4078/4178 High Nov 27 / 26 and the bull trigger
- PRICE: 1.4005 @ 16:09 GMT Nov 29
- SUP 1: 1.3965/28 20-day EMA / Low Nov 25 and a key support
- SUP 2: 1.3858 50-day EMA
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
Trend conditions in USDCAD remain bullish and Tuesday’s fresh cycle reinforced this theme. The move higher confirmed a resumption of the primary uptrend and marked an extension of the bullish price sequence of higher highs and higher lows. Sights are on 1.4196 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. For now, the latest pullback appears corrective.
AUDUSD TECHS: Corrective Bounce
- RES 4: 0.6762 High Oct 9
- RES 3: 0.6733 High Oct 13
- RES 2: 0.6604/88 50-day EMA / High Nov 7 and a reversal trigger
- RES 1: 0.6534/50 20-day EMA / High Nov 25
- PRICE: 0.6512 @ 16:03 GMT Nov 29
- SUP 1: 0.6434 Low Nov 26
- SUP 3: 0.6400 Round number support
- SUP 3: 0.6350 Low Aug 5 and a key support
- SUP 4: 0.6339 Low Nov 10 2023
A bearish theme in AUDUSD remains intact. The fresh cycle low on Tuesday marks an extension of the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend. Scope is seen for a move towards 0.6350, the Aug 5 low and the next key support. The pair has recovered from its recent lows - a correction. Initial firm resistance to watch is 0.6534, the 20-day EMA.
