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Credit Agricole wants Banco BPM tie-up to scale up Italian business - sources

LONDON/MILAN, Oct 1 (Reuters) - Credit Agricole is exploring a possible deal to buy Italy’s third biggest bank, Banco BPM, as a way to scale up its presence in the euro zone’s third biggest economy and take advantage of a consolidating landscape, sources said.

The French bank, led by Philippe Brassac, has set its sights on Banco BPM after discarding alternative options including mid-sized lender Creval which was initially seen as a possible acquisition target, three sources said, speaking on condition of anonymity.

A representative for Credit Agricole said the two banks have had “frequent exchanges” over the years in relation to their partnership agreements in the consumer credit business.

When asked about a deal with Banco BPM, she referred to previous comments made by a Banco BPM spokeswoman denying press reports that the pair have held talks in relation to a possible merger. Banco BPM had no other immediate comment. (Reporting by Pamela Barbaglia in London and Valentina Za and Andrea Mandala in Milan; additional reporting by Maya Nikolaeva in Paris;Editing by Elaine Hardcastle)