Italian Pop Sondrio explores all options after eliminating mutual mode

By Andrea Mandala

MILAN (Reuters) – The chief executive of Italy’s Banca Popolare di Sondrio said on Wednesday he was open to exploring all options for his future, after shareholders approved long-awaited management changes that could open the joint bank to a merger.

However, Mario Pedrazini stressed that while mergers and acquisitions were an option, Popolare di Sondrio was a sound lender that did not need a merger to grow and remain profitable.

“In the future, we will explore all the opportunities that the market can provide that are not necessarily related to mergers and acquisitions,” he told reporters.

Located in the northeastern mountains of Milan, Popolare di Sondrio is the last of the 10 large joint banks targeted by the government’s 2015 reforms to respond to changes aimed at improving governance and making it more attractive to investors.

Under Italian rules, the reciprocal mode gives shareholders one vote each regardless of the size of their stake, reducing the attractiveness of building bets. Investors in Popolare di Sondrio agreed on Wednesday to relinquish the bank’s mutual status to turn it into a joint stock company.

The 2015 reform obligated the so-called “popolari” Italian lenders with assets of more than eight billion euros ($9 billion) to become common stock companies within 18 months.

However, the mandatory changes have been put on hold pending the outcome of lawsuits brought by some shareholders of the joint banks as well as consumer organizations. Once the appeal was rejected, Popolare di Sondrio was given until December 31 to adopt the changes.

While Popolare di Sondrio has maintained its independence and local roots for a long time, it is seen by analysts as a well-managed bank and a major partner in the merger.

For example, the bank is widely seen by bankers and analysts as a potential partner of its bigger rival BPER Banca, whose largest shareholder UnipolSAI is also an investor in Pop Sondrio with a 9.5% stake. Governance changes will allow UnipolSAI to exert influence commensurate with the size of its stake.

Popolare di Sondrio’s chairman, Francesco Venosta, said the bank was not involved in any merger and acquisition talks and did not consider UnipolSAI a “premium” party in such discussions, although he welcomed UnipolSAI’s recent comments by Carlo Sembri.

Sembri said this month that Bieber was “in a very good position” if Populari de Sondrio were to look for a merger.

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