(Updated with press release from Banco BPM, statements from the CEO of Crédit Agricole, stock market price)
PARIS/ROME, December 23 (Reuters) – Crédit Agricole announced on Friday the signing of a memorandum of understanding between its insurance subsidiary and Banco BPM to set up a “long-term” partnership in bancassurance in Italy.
This partnership entered into by Crédit Agricole Assurances (CAA) aims to provide non-life insurance products and related services through Banco BPM’s distribution networks, the French institution said in a press release.
“Beyond the 20-year distribution agreement, the structure of the contemplated transaction provides that CAA will buy 65% of the capital of Vera Assicurazioni and Banco BPM Assicurazioni from BBPM,” said Crédit Agricole.
From a financial point of view, this operation – subject to strict regulatory approvals – “would meet Crédit Agricole SA’s profitability criteria with an expected return on investment of more than 10% over 3 years and should have a very limited impact on the CET1 ratio of Crédit Agricole SA and on the Solvency 2 ratio of CAA”.
In a separate press release, Banco BPM specified that the operation values Vera Assicurazioni and Banco BPM Assicurazioni at 400 million euros, which means that Crédit Agricole will pay 260 million euros for their acquisition.
“We are pleased to have reached this agreement with a long-standing partner of Crédit Agricole and one of the strongest and most reputable banking groups in Italy,” said Crédit Agricole SA Chief Executive Philippe Brassac. , in the press release from his bank.
“This partnership will be another major step in our international expansion strategy,” he added.
Crédit Agricole holds a 9.18% stake in Banco BPM, Italy’s third largest bank behind Intesa Sanpaolo and UniCredit.
On the Milan Stock Exchange, the Banco BPM share gained nearly 0.9% in the first exchanges while Crédit Agricole rose by 0.5% in Paris. (Written by Myriam Rivet and Blandine Hénault with contributions from Sudip Kar-Gupta in Paris and Alvise Armellina in Rome, edited by Bertrand Boucey)