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A Few Words about Italian Banks' Renaissance Origins
Many Italian banks can trace their origins to as far back as the 15th century when city-states and the Roman Catholic Church established individual monti di pietà. The word monte (singular of monti) means "mountain" in Italian, whereas pietà means pity or compassion. Hence, monte di pietà literally means the Mount of Compassion.
During the Renaissance era, these non-profit monti di pietà granted small loans to the underclass and small business owners on the security of collateral (in other words, pawning) at minimal interest rates. As such, these monti di pietà are also described as charitable pawn shops. Since they often also accepted deposits for safekeeping, and relied on this additional source of capital to fund more loans, they were essentially an early form of banks. Other than fighting usury and poverty by encouraging saving and offering low-cost loans, the mandates of the monti di pieta included preserving heritage as well as funding education, hospitals, science research, art and infrastructure.
During the 19th century, many of the monti di pietà were transformed into casse di risparmio (savings banks), though they maintained their various philanthropic mandates. These mandates, while commendable, created a fragmented banking system that was backward, inefficient, bureaucratic and sometimes, corrupt. In almost all cases, the monti di pietà and casse di risparmio continued to be state-controlled by the local government-Church authorities well into the 1990s.
As the European Union prepared to remove trade barriers between member nations in the 1990s, Italy’s fragmented and archaic banking system would be open up to other EU competitors with higher efficiency and more advanced technologies, such as those from Britain, Germany, France and the Netherlands. In order to create national banks strong enough to face the new competition, the Italian government passed two banking reform acts, namely the Amato Act of 1990 and the Ciampi Act of 1998 to privatize the state-owned banks and to foster amalgamation of the regional banks into much larger national banks.
The Amato Act required the savings banks (casse di risparmio) to separate their banking operations from the socially-mandated, non-profit charitable foundations. It also forced the savings banks to convert to the joint-stock form (i.e. public limited-liability company, known as SpA in Italy). Initially, the shares of these newly-spun-off banks could still be held by the social foundations, but the Ciampi Act in 1998 prescribed that the majority shareholdings of the banks held by the social foundations must be sold off gradually. The goal was to ensure a transition towards a purely market-driven, private-sector banking industry away from its former non-profit nature with the dual objectives of providing banking services and promoting philanthropic causes.
Cariverona Banca SpA (formerly Cassa di Risparmio di Verona)
In 1825, the municipal government of Verona established the Civica Cassa di Risparmio di Verona to offer credit for the poor working class. Like many other Italian credit institutions of the time, the savings bank was closely linked to the Monte di Pietà di Verona, the charitable pawning facility. In fact, until 1863, all deposits of the bank were systematically placed with the Monte di Pietà.
In 1864, the rapidly modernizing economy sparked the separation of the savings bank from the Monte di Pietà. In 1872, the Cassa di Risparmio di Verona turned down a proposal to merge with the Cassa di Risparmio delle Provincie Lombarde. In 1892, the Verona municipal government relinquished control of the savings bank. The bank gained permission to expand to other towns of the Veneto (outside of Verona) and Mantua regions in 1900, provided that those towns weren’t already served by a local cassa di risparmio.
World War I disrupted normal lives in Italy, and most of Cassa di Risparmio di Verona’s branches suspended operations. When the Great War ended in 1918, rebuilding efforts promptly commenced and the bank resumed deposit-taking and lending activities. A major consolidation happened in 1927 when the Verona-based savings bank merged with Banca del Monte di Pietà di Feltre, Cassa di Risparmio di Cologna Veneta and Cassa di Risparmio di Legnago e del Basso Veronese. The newly-expanded bank’s official name became Cassa di Risparmio di Verona – Istituto Interprovinciale.
World War II once again devastated Italy between 1940 and 1945. By the time peace returned, however, the Verona savings bank had grown to be the third largest one in Italy. The 1950s and 1960s were difficult times for the Italian economy, and high unemployment and inflation prompted many Italians to emigrate to the North and South Americas.
The computerization age arrived in 1968 when the Cassa di Risparmio di Verona installed an IBM processor to speed up and automate account management. The bank’s first overseas offices opened in Frankfurt and London in 1975. In the same year, the bank celebrated its 150th anniversary by funding the Faculty of Medicine building at the University of Verona, continuing its long history of supporting social, cultural and educational causes. The bank introduced its first ATM machines in 1982, giving clients quicker access to cash.
The bank acquired Cassa di Risparmio di Ancona in 1989 and adopted a new name Cassa di Risparmio di Verona Vicenza Belluno e Ancona. In 1991, in accordance with the Amato banking reform act, Cassa di Risparmio di Verona was spun off from the newly created Fondazione Cassa di Risparmio di Verona, which became in charge of the organization’s social and charitable mandates.
In 1994, the Fondazione sold 7.5% of Cassa di Risparmio di Verona to the public as another step to transform the bank into a market-driven business. Later in the same year, Fondazione Cassa di Risparmio di Verona and Fondazione Cassamarca transferred their respective banking subsidiaries into a newly-created holding company called UniCredito SpA. In 1995, Cassa di Risparmio di Verona changed its name to Cariverona Banca SpA.
Cassamarca (formerly Cassa di Risparmio delle Marca Trivigiana)
In 1496, the Catholic Church and municipal officials in Treviso, in north-eastern Italy, jointly established pawning-credit facility Monte di Pietà di Treviso. The monte di pietà then in 1822 founded a more modern banking division called Cassa di Risparmio di Treviso. In 1866, Treviso along with the rest of Veneto was annexed to the Kingdom of Italy. A Royal Decree two years later transferred the control of the savings bank to Cassa di Risparmio delle Provincie Lombarde. In 1913 though, Treviso’s Monte di Pietà decided to re-establish its own savings bank and founded the non-profit Cassa di Risparmio delle Marca Trivigiana.
During World War I, the bank temporarily re-located its employees and assets to Florence while Treviso was under heavy fire. After the Great War, the saving bank took over Cassa di Risparmio di Castelfranco Veneto in 1928, then Banca Popolare di Asolo in 1938. Between 1941 and 1942, the operations of the Monte di Pietà di Treviso, Banco Popolare di Asolo and Cassa di Risparmio de Castelfranco Veneto were integrated into Cassa di Risparmio delle Marca Trivigiana. In 1949, the savings bank took over the charitable pawnshop-lender Monte di Pietà in nearby Vittorio Veneto.
The savings bank’s lengthy name was shortened to Cassamarca in 1987. In 1992, a parent company called Fondazione Cassamarca was created to hold Cassamarca SpA the bank, which had just been converted to joint-stock status.
In 1994, the two foundations controlling Cassa di Risparmio di Verona and Cassamarca combined their banking subsidiaries under a new parent company called UniCredito SpA, becoming a powerhouse in north-eastern Italy.
Banca CRT (formerly Cassa di Risparmio di Torino)
The Turin (Torino, in north-western Italy) city council founded the Cassa di Risparmio di Torino in 1827. The savings bank was separated from the town council in 1853.
Towards the end of the 19th century, Cassa di Risparmio di Torino gradually transformed itself into the type of modern bank as we think of banking today, from its original sole mandate of providing savings and lending access to the city’s lower class population. By the early 20th century, the bank was actively involved in the financing of northern Italy’s cotton and wool industries, as well as automotive concern Fiat.
After fascist leader Benito Mussolini gained power over Italy in 1922, many savings banks, including the Cassa di Risparmio di Torino, lost their autonomy during the 1920s under the new directives of the central government. Between 1928 and 1941, however, the bank took over three other casse di risparmio: in Casale Monferrato, Pinerolo and Ivrea.
As part of the Axis Powers during World War II, Italy was turned into a battleground and suffered heavy damage and casualties. When peace returned in 1945, the savings bank helped to finance the rebuilding of infrastructure, agriculture and industries in northern Italy. Like other casse di risparmio, Cassa di Risparmio di Torino had a history of supporting charitable causes. In 1961, it contributed financially to the modernization of hospital equipment in Piedmont.
The opening of an office in Rome in 1972 made it the bank’s first office outside of the Piedmont region. The bank began to use the initials CRT in 1978 to make its name less cumbersome and less Turin-confined.
Italy’s casse di risparmio had had a long tradition of not overstepping into each other’s market before the 1980s. Customers’ desire to do banking outside of their immediate home region, and the fact that such convenience had been available in other developed countries for up to 10 years, finally forced Italy’s savings banks to open offices outside of their home markets. In 1983, CRT opened its first full-service branch outside of Piedmont in Milan, which is in the nearby region of Lombardy. Soon, other branches were opened in Veneto, Liguria, Emilia Romagna and Tuscany.
In 1988, Cassa di Risparmio di Torino formally adopted the modernized name Banca CRT. Three years later, in compliance with the banking reform law the Amato Act, CRT transformed itself into Fondazione Cassa di Risparmio di Torino to continue its charitable and social mandates, while the banking side was turned into a limited-liability concern called Banca CRT SpA.
Between 1992 and 2002, Banca CRT increased its number of branches from 299 to 456, making it one of the largest banks in the country.
- In 1994, Fondazione Cassa di Risparmio di Verona and Fondazione Cassamarca, which held a majority stake in Cassa di Risparmio di Verona and Cassamarca SpA respectively, created a new umbrella company called UniCredito SpA – Gruppo Bancario del Nordest.
- In 1995, Cassamarca acquired a 5.4% stake in Slovakia’s Slovack Pol'nobanka, marking Cassamarca’s first foray into the Central and Eastern European market.
- In 1995, Fondazione Cassa di Risparmio di Torino transferred its holding in Banca CRT SpA to UniCredito SpA and also became a shareholder of UniCredito joining the two foundations that held Cariverona Banca SpA and Cassamarca SpA.
- In 1998, UniCredito was acquired by Credito Italiano for ITL 19.5-trillion (USD $10.96-billion). The new entity took up a new name UniCredito Italiano (now UniCredit).
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