The French takeover bid for BPM is a perfect illustration of the government’s spectacular failures when it comes to banks

The news of the proposal put forward yesterday by Crédit Agricole to Banco BPM to merge the institution led by Giuseppe Castagna with the French bank’s Italian subsidiary is the perfect snapshot of an interesting phenomenon affecting the Italian banking system, which in recent years has been the scene of a dramatic reshuffle in which the government has attempted to play a series of moves that have consistently resulted in a succession of spectacular strategic failures. The Meloni government has chosen to entrust the ‘banking Risk’ game to a ‘goal-scoring’ duo – which, over the months, has become an ‘own-goal’ duo – led by Minister Giancarlo Giorgetti (Lega) and the chief of staff to Prime Minister Giorgia Meloni, Gaetano Caputi. At the heart of the plan lay the following ambition: to do everything possible to create a third banking bloc centred on the MPS-BPM axis, relying heavily on Luigi Lovaglio (CEO of MPS), Giuseppe Castagna (CEO of BPM) and Vittorio Grilli (chairman of Mediobanca).

Giorgetti’s (and Caputi’s) guidelines were clear: to focus on Italian identity in order to secure a future for a third player capable of counterbalancing the duopoly represented by Unicredit and Intesa Sanpaolo. To achieve this, Giorgetti first fended off Unicredit’s bid for BPM, deploying a ‘golden power’ measure of an unusual nature against an Italian bank – namely, Unicredit. Once he realised the risk that, by saying ‘no’, he had exposed BPM to the advances of foreign banks, Giorgetti asked Unicredit once again to step in and launch a public takeover bid for BPM. By that point, however, Unicredit had already decided to stake everything on the Commerzbank deal in Germany, and the result is what we see before us: a French bank, acting in a non-hostile manner, which aims to become the guardian of Italy’s third major banking group, partly thanks to the use of a tool – the ‘golden power’ – which the government had previously employed to defend BPM from ‘foreign banks’.

The government had also staked its chips on another scenario, namely the possibility of putting MPS in a position to act as the guarantor of the third political bloc. To this end, the Ministry of Economy and Finance (MEF) supported, behind the scenes, the manoeuvre through which Lovaglio built up his resistance within MPS, and the MEF also discreetly backed Lovaglio in his attempt to halt Intesa’s public takeover bid, in the hope of seeing MPS’s takeover of Banca Generali and BPM take shape (which would also have pleased Palazzo Chigi). Here too, it was a flop: on 29 October, the MPS shareholders’ meeting rejected the entire defensive strategy devised by Lovaglio, who is set to leave MPS (just as his key mentor, Vittorio Grilli, is also set to leave Mediobanca). More cynical observers, piecing these elements together, could easily note that, at least so far, the government’s policies on the banks have produced results very different from what was expected. With the Intesa deal now nearing completion, part of MPS is set to end up under the control of Unipol and BPER – that is, groups linked to the world of the ‘red’ cooperatives (although it would, of course, be nonsense to regard Carlo Cimbri, chairman of Unipol, as a manager wielding a hammer and sickle).

Thanks to the government’s refusal, Unicredit has abandoned its plans for growth in Italy via BPM and has continued its expansion project in Germany via Commerzbank. BPM, which was supposed to be the flagship of the ‘third pole’s’ Italian identity, is set to speak French. And Mediobanca is now on course to come under the control of Intesa, contrary to what the Ministry of Economy and Finance had envisaged. The fact that the new banking landscape differs from what the government envisaged does not mean that the new situation is negative – far from it – and suggests, if anything, that Italian banks are vibrant, attractive, sound and capable of growing like few other European banks, despite the government’s attempts not only to steer them but also to squeeze them for cash. The unintended result of these unsuccessful moves could, however, offer Italy an interesting scenario characterised by a new balance, at the heart of which lies the key issue – one that naturally concerns Generali – and which, thanks to the reshuffle the government has undergone, could give rise to a new three-way balance comprising Intesa Sanpaolo, Unicredit and the Caltagirone Group.

The direction set by politics in the banking sector has not yielded the hoped-for result. For Italian capitalism, this could be good news. For the Italian government, probably not. It remains to be seen whether an executive that has recklessly wielded the ‘golden power’ – achieving results contrary to those it had envisaged – will now find itself, during the election campaign, in a position where it must choose between using the ‘golden power’ again against a deal it helped to create, or accepting that the third banking bloc will be different from what it had imagined. This is also due to a paradox that will have to be addressed sooner or later: having a little less ‘Italianness’ in the banks, as a direct consequence of a policy aimed – through clumsy use of the ‘golden power’ – at protecting that very ‘Italianness’. Claudio Cerasa