Belgian bank Dexia and Italian bank Sanpaolo IMI are holding talks, possibly about a merger or a joint venture, according to reports leaked as The Banker went to press.
However, analysts believe it is difficult to find strategic value in any operation the two banks may be considering.
Italy has been out of bounds for acquisitive foreign banks in recent years. Antonio Fazio, the governor of Italy’s central bank, is keen on domestic consolidation to create at least two financial champions of a reasonable size on the European stage.
Banca Intesa and Unicredito Italiano, the two largest and best-run banks in Italy, have embarked upon expansion plans in central and eastern Europe.
Sanpaolo, Italy’s third largest bank, appears to be at a loss for a strategy, possibly because infighting, a top-heavy structure and a number of resignations have taken up management time.
Spanish bank Santander Central Hispano, which has an 8.6% stake in Sanpaolo, has been pushing for change, calling for a managing director to be appointed to make up for the perceived deficiencies of Alfonso Iozzo, the chief executive.
Pietro Modiano, a top executive from Unicredito, has been handed the post with a brief to put an end to what Enrico Salza, the chairman of Sanpaolo, has described as a “soap opera”.
Santander, three Italian foundations and the French Caisse des Dépots et Consignations signed a stability pact in April that accounts for 30% of Sanpaolo’s shares. This high percentage of votes would enable the group to veto any major Sanpaolo deal.
Sanpaolo has Italy’s largest asset management division and the country’s second largest life assurance arm. Joint ventures with Dexia in these specific areas may be a possibility, although it is difficult to see how they would enhance revenue.
Santander is busy handling its acquisition of Abbey in the UK so is unlikely to counterbid. However, it has often expressed an interest in the Italian market. Santander declined to comment.
Sanpaolo and Dexia are both known to be possible takeover candidates so analysts believe a merger between the two would be a defensive move.
The banks would have a market capitalisation of E33bn if they merged fully but it is unlikely investors would give such a deal the go-ahead.
