Banco BPM’s rally in Piazza Affari continues today with the stock starting to close with + 1.55% at € 2.824, new highs from March 2018. Since the beginning of the year, the stock of the bank born from the merger between Banco Popolare and BPM has recorded more than + 56%, the best performer in the entire Ftse Mib. Bper also rose sharply (+ 2.5%).
Yesterday the market has returned to betting on a possible marriage with Bper. KBW analysts believe that it would make more sense for Banco BPM to merge with BPER than a deal with UniCredit and estimate a potential EPS increase of 54%.
Last week press rumors reported that Giuseppe Castagna, ceo of Banco BPM, it would have recently updated the BoD on the M&A issue, expressing its support for evaluating a combination with Bper in order to create a third banking hub.
De-risking facilita coinvolgimento in M&A
Banco BPM’s board, according to what Il Messaggero reports today, should ratify the sale of 1.5 billion euro of NPLs as part of the `Rockets` project, announced to the market on the occasion of the quarterly results. The operation, which provides for the sale of the portfolio to an SPV and the use of the GACS on the senior tranches issued, was expected to close by the end of the second quarter of this year. The sale allows for a further improvement in the bank’s risk profile, with the NPE ratio falling from 7.5% to 6.3%, says Equita. According to the article in the Roman newspaper, the sale price is higher than 30%, plus up to 5% of the tax benefit due to the “Sostegni bis” decree in the event of the sale of impaired loans. The deal is expected to be assisted by GACS.
“Following the sale, Banco BPM’s gross NPE ratio should drop from 7.5% to 6.3%, accelerating the de-risking that should facilitate Banco BPM’s involvement in the consolidation process”, is the view of the experts of Intesa Sanpaolo which have an ‘add’ recommendation on Banco BPM with a target price of € 2.2.