06 February, Blasting News
Giuseppe Castagna, Banco Bpm Ceo, strong of the experience of the merger of Banco Popolare with Banca Popolare di Milano, has recently suggested that other banks may follow the example, bringing to the creation of the third largest bank of the country.
More in detail, it’s not to be excluded that, during this consolidation process, Banco Bpm might play an important role, thanks to its experience with the regulating authorities. We must also remember that the merger between the two banks was the only merger under the surveillance of the ECB when Danièle Nouy was guiding the committee.
Consolidating and the NPL matter
According to Castagna, the foundations of the merger and the consolidation are motivations of industrial nature such as more efficiency and the improvement of the service to customers, as well as of structural nature, in the measure that the adjustment costs and the clean-up of the financial statement are supported by a bigger structure.
In 2018, the introduction of the accounting principle IFRS 9 will be a bigger incentive to reduce the stock of bad loans, favoured by the possibility of transferring the impact on the balance sheet without affecting the profit and loss statement. Concerning Banco Bpm, the NPL reduction plan will go faster than expected including a securitisation with Gacs for an amount comprised between 3 and 5 billion.
Political uncertainty and 2018 outlook
Replying to the concerns regarding the upcoming elections, the manager has repeated how the essential requirement for the country to grow remains the political stability. It’s essential that the country will walk a path consistent with that of the other European nations.
Concerning the economic situation, the outlook is still positive, thanks to the growth of production and exportations. Banks have to be ready to provide the necessary funding. A challenge that Banco Bpm, thanks to its ongoing reorganization process, might accomplish successfully.
Source: Blasting News
Translator: Cristina Ambrosi