La Française: Crédit Agricole takes a 9% interest in BPM, what’s the likelihood of a merger?
La Française: Crédit Agricole takes a 9% interest in BPM, what’s the likelihood of a merger?
By Jérémie Boudinet, Credit Fund Manager, La Française AM
First and foremost, I consider the move by Crédit Agricole SA as defensive; a tactic to protect its existing business partnerships with Banco BPM. Even though the French bank made the same move previously with Credito Valtellinese, before ultimately absorbing it, merging with Banco BPM would be much more financially significant.
Furthermore, a merger would likely require the approval of the group’s French regional banks (Caisses Régionales de Crédit Agricole, which hold more than 50% of Crédit Agricole SA, aka CASA), which could be reluctant to ratify the decision. Crédit Agricole Group was quite traumatized by the disaster left after its former foreign adventures (i.e., Emporiki and Bankinter stakes sold with significant losses in 2012) and may therefore discourage Crédit Agricole SA from embarking again on this path.