All options to be explored by Italy’s Pop Sondrio

Italy’s Banca Popolare di Sondrio’s CEO said that it is open to exploring all options for its future. This is after shareholders approved long-delayed governance changes that could open the mutual bank up to a merger. Yet Mario Pedranzini stressed that, while M&A was an option, Popolare di Sondrio was a healthy lender that did not need a merger to grow and remain profitable. He told the media that in the future they will explore all the opportunities that the market can offer. This is not necessarily M&A.

Nestled in the mountains north-east of Milan, Popolare di Sondrio is the last of 10 large mutual banks, that is targeted by a 2015 government reform to yield to changes aimed at improving governance. Under Italian rules, the mutual status gives shareholders one vote. Investors in Popolare di Sondrio approved shedding the bank‘s mutual status to turn it into a joint-stock company. The 2015 reform obligated Italy’s so-called “popolari” lenders with more than 8 billion euros ($9 billion) in assets. And that is to become ordinary joint-stock companies within 18 months.

The mandatory changes were however put on hold pending the outcome of court cases.  While Popolare di Sondrio has long guarded its independence and local roots, it is viewed by analysts as a well-managed bank and a prime merger partner. The bank is, for example, widely seen by bankers and analysts as a possible partner for bigger rival BPER Banca, whose top shareholder UnipolSAI is also an investor in Pop Sondrio with a 9.5% stake. The governance changes will allow UnipolSAI. This is to wield an influence corresponding to the size of its stake. Popolare di Sondrio Chairman Francesco Venosta said that the bank was not in any M&A talks and did not consider UnipolSAI a “privileged” party in such discussions. Cimbri said that BPER was “very well placed” if Popolare di Sondrio were to look for a merger.