The long-awaited consolidation of the Italian banking industry got under way yesterday when Banca Intesa and Sanpaolo IMI, the country's second and third-largest banks, said they were considering a possible merger.
The banks' boards are expected to meet tomorrow to consider the proposed deal, which would create a financial institution with a market capitalisation of more than €60 billion.
The proposed deal follows months of intense talks between executives amid pressure for consolidation from politicians and from Mario Draghi, the new governor of the Bank of Italy.
"I view positively the birth of a great Italian bank, of a size big enough to play an important role on the European and international markets," said Tommaso Padoa-Schioppa, Italy's finance minister. He stressed, however, that the centre-left government was not actively involved in promoting the merger.
People familiar with the matter said the two banks were considering a deal which would be structured as a merger of equals, and would deliver annual cost savings of at least €1 billion.
Investors reacted positively to the deal, which the banks confirmed in a statement. Shares in Intesa closed up 7 per cent at €5.01, while shares in Sanpaolo rose 6 per cent to €15.57.
