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Crédit Agricole Proposes Banco BPM Merger to Create Italy’s Third-Largest Bank

By  |  November 9, 2026
Crédit Agricole Proposes Banco BPM Merger to Create Italy’s Third-Largest Bank

Crédit Agricole SA has proposed combining its Italian banking operations with Banco BPM SpA in a transaction that would establish Italy’s third-largest banking group, marking a significant expansion of the French lender’s presence in one of Europe’s most competitive banking markets.

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    The proposal, announced Monday and reported by the Financial Times, would increase Crédit Agricole’s ownership in the combined institution to approximately 45%, compared with its existing 29.6% holding in Banco BPM. The new banking group would serve about 6.5 million customers through a network exceeding 2,300 branches.

    Under the proposed terms, Banco BPM shareholders would receive an exchange ratio incorporating a 20% valuation premium, alongside an extraordinary dividend totaling €1 billion ($1.1 billion), according to Crédit Agricole’s announcement.

    The French bank estimates the combination could deliver approximately €800 million in annual cost savings and other financial benefits before taxes. It also projects a roughly 24% increase in Banco BPM’s earnings per share in 2027.

    Banco BPM shares advanced more than 9% in early trading Monday as investors assessed the proposal, while Crédit Agricole shares declined approximately 1%, Reuters reported.

    French Lender Seeks Greater Italian Scale

    The proposed transaction would combine Crédit Agricole Italia’s retail banking operations with Banco BPM’s established domestic network, creating a larger competitor to Italian banking leaders Intesa Sanpaolo and UniCredit.

    Crédit Agricole has characterized the proposal as a cooperative transaction rather than a hostile acquisition. The combined institution would preserve Banco BPM’s Italian identity, maintain its Milan stock-market listing and continue operating under the leadership of Banco BPM Chief Executive Giuseppe Castagna.

    According to the French bank’s statement, the new institution would retain operational independence, supported by a governance structure in which independent directors would hold a majority of board seats.

    The combination would also broaden the group’s capabilities in insurance, investment management and other financial services, giving the enlarged bank opportunities to distribute products across a wider customer base.

    The proposal represents another step in Crédit Agricole’s international expansion strategy as the lender seeks additional growth beyond its established French retail banking operations.

    Italian Banking Consolidation Intensifies

    The approach comes amid an extended period of mergers and acquisition activity across Italy’s financial industry, where lenders are pursuing greater scale and operational efficiency.

    As the Financial Times reported, the proposed combination could reshape competition in Italy by establishing a substantial third banking group alongside the country’s two dominant lenders.

    The transaction also carries political implications. Italian authorities have previously expressed interest in developing another major domestic banking institution capable of competing with Intesa Sanpaolo and UniCredit.