Verona-based Banco Popolare and the Banca Popolare di Milano (BPM) are aiming to gradually offload up to 10 billion euros in non-performing loans by 2019, according to the plan for their merger. The two lenders agreed to merge on Wednesday to form Italy's third-biggest bank. The European Central Bank has given preliminary approval after Banco Popolare agreed to a one-billion-euro capital increase. Banco Popolare CEO Pier Francesco Saviotti said Thursday that there will no redundancies after the merger. "There won't be any problems regarding the employees, there won't be any sackings," Saviotti told a news conference. "Those who leave will do so because they want to take part in the solidarity funds. The employees are our strength, just like the clients are".
Banca Popolare di Milano (BPM) CEO Giuseppe Castagna said Thursday a merger with Banco Popolare will not result in any spinoffs. "We are not obligated to make any sales," he told reporters. "Obviously there will be some rationalizing," he added. "It's possible to find some synergies and through them it will be possible to value some of these assets, including externally, and in ways we will invent while coming up with an industrial plan". Castagna added BPM is not considering any other mergers. "We face a burdensome task," he said. "Right now we're concentrating on this merger". The European Central Bank (ECB) gave an informal OK to the merger Wednesday but said it wanted a strong capital position for the new group as a key condition for its final approval. The merger needs to create a new group with a strong position in terms of capital and asset quality right from the start as it would become the third-largest bank in Italy, the ECB said in a letter to BPM. The ECB also set as conditions a multi-annual industrial plan and a clear and efficient system of governance.
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