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Company News

Italian regional bank Credem seals deal to buy smaller rival CR Cento

MILAN, Oct 23 (Reuters) - Italian regional bank Credem said on Friday it had signed a memorandum of understanding to buy smaller rival Cassa di Risparmio di Cento (CR Cento) in a deal that will strengthen its market share in its Emilia Romagna home region.

Credem’s solid balance sheet and strong capital buffers have prompted expectations it would play an active role in the consolidation wave sweeping through Italy’s fragmented banking sector.

Credem had entered exclusive talks with CR Cento in April and its management has said this would not be an isolated deal although the bank would take a prudent approach to M&A and ruled out any rescue deals.

Credem said when CR Cento is fully integrated in 2023, it would add more than 15 million euros ($18 million) of net profit, with additional revenues of some 9 million and cost savings of 13 million.

Credem, which posted a first-half net profit of 78 million euros, manages total assets worth around 53 billion euros versus CR Cento’s 2.9 billion.

Before entering exclusive talks with Credem in April, the Cento-based savings bank had been a takeover target for Lombardy-based Banca Popolare di Sondrio.

But the European Central Bank last year blocked the acquisition saying Popolare di Sondrio had to clean up its balance sheet from bad debts first. ($1 = 0.8440 euros) (Reporting by Andrea Mandalà; editing by Jane Merriman)

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