France :French banking giant Societe Generale on Monday denied reports of a possible merger with Italy’s Unicredit, after the Financial Times said a tie-up was being considered.
In a brief statement to AFP, Societe Generale said its board was not discussing a possible merger with Italy’s largest bank, a move that would combine two giants of European finance were it to go through.
Unicredit said it “never comments on rumours or speculation”.
The Financial Times on Sunday, citing several sources familiar with the matter, said Unicredit chief Jean-Pierre Mustier, a Frenchman who once worked for SocGen, has explored the idea of joining the two banks for several months, although no formal approach has been made.
The volatile political situation in Italy, where a new anti-immigrant, eurosceptic government took power last week, has pushed back the timetable for a deal from the original plan of 18 months, the paper reported.
Shares in Unicredit rose 3.5 percent on the Milan stock exchange as trading opened Monday, receding to 1.1 percent by midday.
Societe Generale’s shares were meanwhile up 1.95 percent.
Analysts say that were such a tie-up to take place, it would be reflective of wider issues in the European banking sector which, 10 years after the financial crisis, has too many banks making too little money.
Misconduct fines and losses on bad loans, combined with low interest rates on lending, have eroded profits, making mergers more attractive. mobile technology has also made some branches obsolete.
UniCredit was one of the worst-performing banks in stress tests conducted by the European Banking Authority (EBA) in 2016, but Mustier took over in the summer of that year and embarked on a massive reorganisation that returned it to profit.
As well as disposing of assets and reducing non-performing loans, the bank has slashed thousands of jobs.
