Italy Bank Mergers & Acquisitions (UniCredit Page 3)

Photo: A UniCredit Banca branch in Roma. UniCredit Banca is UniCredit SpA's retail banking unit.


Credit: Special thanks to my dear friends Don Trynor and Rupert Pacudan for taking this photo during their Grand Tour of France, Switzerland and Italy.


UniCredit SpA (formerly known as UniCredito Italiano)

Italy’s UniCredit is a banking behemoth that came into being only in 1998 when Credito Italiano SpA acquired UniCredito SpA for ITL 19.5-trillion (USD $10.96-billion) to become UniCredito Italiano.

Between 1998 and 2003, UniCredito Italiano consolidated four other domestic regional banks, whose brief histories are explained below. The bank formally changed its name to UniCredit SpA in 2008.

Glossary:

Cassa di risparmio (casse di risparmio in plural) literally means "Chest/ Case of Savings," or savings banks in English.  In Italy, casse di risparmio are often small, state-owned savings and credit institutions controlled or managed by a municipal or regional or provincial government agency.

Monte di pietà (monti di pietà in plural) literally means "mount of compassion" in English.  They are usually church-sponsored charitable pawnbrokers that provided deposit and lending services to the poor and working class during the Renaissance period. Many of Italy's monti di pietà can trace their origins to the mid-1500s.  The monti di pietà eventually evolved into, or were taken over by the casse di risparmio (savings banks) in the 19th century.


Caritro SpA

Caritro can trace its lineage to the 1841 establishment of Cassa di Risparmio di Rovereto and the 1855 founding of Cassa di Risparmio di Trento. Rovereto and indeed the province of Trentino at the time was part of the Austro-Hungarian Empire. During the turbulent times of World War I, C.R. di Rovereto had to suspend operations. When peace returned in 1919, Trentino was transferred to Italy under the Treaty of Saint-Germain. During an economic crisis in 1934, C.R. di Trento and C.R. di Rovereto merged to become the Cassa di Risparmio di Trento e Rovereto.

Fast forward to 1992, C.R. di Trento e Rovereto in compliance with the Amato savings bank reform law was split into a joint-stock bank called Caritro SpA and its holding entity Fondazione Cassa di Risparmio di Trento e Rovereto. In 1998, the holding foundation transferred Caritro SpA to UniCredito Italiano in exchange for a minority stake in UniCredito Italiano.


CRTrieste-Banca SpA

In 1842, the Monte Civico e Commerciale was founded by the Trieste municipal government and chamber of commerce. Trieste at the time was an Italian-speaking region of the Austro-Hungarian Empire along the present-day Italian-Slovenian border. In 1877, the institution changed its name to Cassa di Risparmio Triestina. With the dissolution of the Austro-Hungarian Empire at the end of World War I, Trieste was transferred to Italy.

In 1938, the savings bank changed name once more to Cassa di Risparmio di Trieste. At the end of World War II in 1945, the southern part of the Trieste province was transferred to Yugoslavia (present-day Slovenia). C.R. di Trieste thus lost some its branches and operations in the areas that were handed over to Yugoslavia.

During the 1980s, C.R. di Trieste opened representative offices in Eastern Europe, namely in Koper, Slovenia (also known as Capodistria in Italian), Prague and Budapest. In 1992, C.R. di Trieste was split into joint-stock bank CRTrieste-Banca SpA and its holding foundation.

In 1998, UniCredito Italiano first acquired a 28% interest in CRTrieste-Banca, a prelude to its eventual full acquisition of the regional bank.


Banca dell’Umbria 1462

In 1908, the Cassa di Risparmio di Perugia was established. Amongst the other financial institutions it amalgamated in the 20th century was the 1972 acquisition of Monte di Pietà di Perugia, which was founded in 1462 and the earliest recorded monte di pietà in Italy.

The separation of Cassa di Risparmio di Perugia into the limited-liability bank and its holding foundation happened in 1992. In 1999, the bank adopted the new name Banca dell’Umbria 1462, taking advantage of its remote lineage to the original Monte di Pietà in Perugia that was established in 1462.

In 2000, UniCredito Italiano’s Rolo Banca 1473 unit bought 71.8% of Banca dell’Umbria 1462 for Eur 315-million.


Cassa di Risparmio di Carpi SpA

In 1843, the Duke of Modena approved the creation of the Cassa di Risparmio di Carpi as a savings bank. Like other savings bank, C.R. di Carpi had a history of funding local socio-economic, educational and infrastructural projects. For example, the bank’s 1927 article of association required that 30% of the bank’s profits be directed to chartable and public works.

In compliance with the Amato Law, C.R. di Carpi in 1991 was split into the for-profit Cassa di Risparmio di Carpi SpA and the holding charitable foundation Fondazione Cassa di Risparmio di Carpi. In 2000, UniCredito Italiano (via its Rolo Banca 1473 unit) bought 73.8% of Cassa di Risparmio di Carpi for Eur 238-million. By 2003, UniCredito Italiano had taken full control of C.R. di Carpi when the minority shareholdings were bought out.


Recent transactions (from 1998 onwards):

• In 1999, UniCredito Italiano bought 50.1% of Poland’s No. 2 bank, Bank Pekao for Euro 1.03-billion (USD $1.0-billion).
• In 2000, UniCredito Italiano bought 50.6% of Splitska banka d.d. for Eur 48-million. Splitska banka was Croatia’s No. 3 bank with a network of 70 branches. Following a Eur 10-million capital injection, UniCredito Italiano’s stake in the Croatian bank was raised to 62.6%.
• In 2000, UniCredito Italiano bought another 51% of Slovakia’s Pol’nobanka for Eur 30-million. Pol’nobanka had 45 branches. One of UniCredito’s predecessors, Cassamarca, had held a 5% stake in the Slovak bank since 1995.
• In 2000, UniCredito Italiano bought Boston-based Pioneer Group’s global investment management division, Pioneer Global Asset Management, for ITL 2.68-trillion (USD $1.23-billion).
• In 2000, insurance giant Generali sold its 36.9% interest in CRTrieste-Banca to UniCredito Italiano, which had had a 28% interest since 1998. Subsequently, UniCredito Italiano launched an offer for the remaining shares held by the public, raising its total stake in CRTrieste-Banca to 79%.
• In 2000, UniCredito Italiano along with Allianz AG, bought 98% of Bulbank AD, Bulgaria’s No. 1 bank, for Eur 360-million (USD $344-milion). UniCredito Italiano took up 93% of Bulbank, while Allianz’s share was 5%. Bulbank had 28 full branches plus 51 representative offices.
• In 2000, UniCredito Italiano took a 10% stake of Zagrebačka banka d.d., Croatia’s No. 1 bank.
• Between 2002 and 2003, the various retail banks under the UniCredito Italiano umbrella were merged into UniCredit Banca as part of the S3 project. The S3 project referred to the three core segments of the group: retail banking, enterprise banking and private banking.
• In 2002, UniCredito Italiano bought 82.5% of Demirbank Romania, continuing its aggressive expansion in the Central and Eastern European market.
• In 2002, UniCredito Italiano and partner Allianz took full control of Croatia’s Zagrebačka banka d.d. With this purchase UniCredito Italiano now controlled Croatia’s No. 1 and No. 3 banks. In order to comply with Croatia’s anti-monopoly regulation, the Italian lender agreed to sell its 62.6% of stake in Splitska banka to HVB Group’s Bank Austria unit for Eur 94-million. Later in 2005 though, when UniCredito Italiano took over HVB Group and Bank Austria, it indirectly re-acquired control of Splitska banka, and was required to sell it a second time.
• In 2002, UniCredito Italiano bought 50% of Turkey’s Koc Financial Services from Koc Holding for USD $240-million. Koc Financial Services controlled the 115-branch Kocbank.
• In 2002, UniCredito Italiano bought 85.2% of Czech Republic’s Živnostenská banka A.S, which operated 8 branches and 19 agencies.
• In 2005, UniCredito Italiano’s 50% owned Turkish joint-venture Koc Financial Services bought 57.42% of Yapi ve Kredi Bankasi A.S. for Eur 1.16-billion.
• In 2005, UniCredito Italiano took over all of Germany’s HVB Group and its 77.5% owned Bank Austria Creditanstalt and Bank Austria Creditanstalt’s 71.2% owned Bank BPH (of Poland) for Eur 15.4-billion. UniCredito Italiano also made an offer to acquire the 22.5% of Bank Austria Creditanstalt not yet owned by HVB Group for Eur 2.63-billion, and the 28.8% of Bank BPH not yet owned by Bank Austria Creditanstalt for Eur 1.48-billion. The total offer for 100% of HVB Group, Bank Austria Creditanstalt and Bank BHP was thus Eur 19.5-billion (USD $24.5-billion). The enlarged UniCredito Italiano will have over 7,000 braches in 19 countries serving more than 28-million clients.
• In 2006, due to opposition from the Polish banking regulator over UniCredito Italiano’s control over both Bank Pekao and Bank BPH (Poland’s No. 2 and No. 3 banks), UniCredito Italiano withdrew its Eur 1.55-billion offer for 28.8% of Bank BPH, though it still indirectly owned 71.2% of the Polish bank BPH through its purchase of Germany’s HVB Group.
• In 2006, UniCredito Italiano’s subsidiary Bank Austria bought Russian stockbroker ATON for USD $424-million.
• In 2006, UniCredito Italiano’s Bank Austria Creditanstalt unit bought 46.2% of International Moscow Bank from other minority shareholders for USD $810-million. Following the purchase, UniCredito Italiano’s held just over 90% of International Moscow Bank.
• Back in 2002, UniCredito Italiano briefly owned both Zagrebačka banka, and Splitska banka, two of Croatia’s top banks. In order to satisfy Croatia’s anti-monopoly regulation, UniCredito Italiano sold Splitska banka to HVB Group in 2002, but only to gain it back when it bought out HVB Group in 2005. UniCredito Italiano was again required to sell Splitska banka in 2006, this time to France’s Société Générale SA for Eur 1.0-billion.
• In 2006, Turkey’s Kocbank merged with Yapi ve Kredi Bankasi, the name Kocbank was retired. The enlarged Yapi Kredi became Turkey’s No. 4 bank with 643 branches. Following the merger, Koc Holding and UniCredito Italiano continued to co-own Koc Financial Services, 82% shareholder of Yapi Kredi.
• Also in 2006, UniCredito Italiano sold 2S Banca, Italy’s No.2 securities custodian to Société Générale SA for Eur 579-million.
• In 2007, UniCredito Italiano settled with the Polish banking regulator’s objection over its control of both Bank Pekao and Bank BPH and agreed to sell 200 of Bank BPH’s 480 branches, as well as the brand Bank BPH itself to GE Money for Eur 625-million (USD $893-million). GE Money is the financial services division of General Electric Co.
• Also in 2007, UniCredito Italiano acquired Capitalia SpA Eur 21.83-billion (USD $29.47-billion). The combined Italian giant will have 9,000 branches around the world with 40 million clients. It will become the No. 2 bank in Italy and in Germany, as well as the No. 1 bank in Austria and in Central and Eastern Europe. Capitalia is the parent company of Banca di Roma, Banco di Sicilia, Bipop-Carire and MCC (MedioCredito Centrale).
• Also in 2007, UniCredito Italiano took full control of International Moscow Bank by acquiring the remaining 9.97% of International Moscow Bank that it didn’t yet own for Eur 171-million (USD $229-million).
• Also in 2007, UniCredito Italiano's Vienna-based Bank Austria Creditanstalt AG unit agreed to buy at least 85% of Kazakhstan's No. 5 bank AO ATF Bank for Eur 1.7-billion (USD $2.27-billion). Almaty-based ATF Bank had an 11.8% market share in Kazakhstan and operated 110 branches.
• Also in 2007, UniCredito Italiano’s Bank Austria Creditanstalt unit bought Ukraine's Ukrsotsbank (USB) for Eur 1.61-billion (USD $2.2-billion). USB operated 497 branches.
• In 2008, UniCredito Italiano formally changed its name to UniCredit SpA.
• Also in 2008, in accordance with an agreement with Italy's anti-monopoly authority in the UniCredit-Capitalia merger, UniCredit sold 184 branches and their accounts and assets to 12 rival banks for Eur 747-million (USD $1.16-billion). The major acquiring banks were Banca Popolare di Milano, Credito Emiliano, Banca Carige, Banca Popolare dell'Emilia Romagna and Banca Popolare dell'Etruria e del Lazio.
• In January 2016, UniCredit agreed to sell (transfer) its Ukrainian subsidiary PJSC Ukrsotsbank to Luxembourg-based, privately-held ABH Holdings (Alfa Bank Group) in exchange for a 9.9%-stake of ABH Holdings. ABH owns several banks in a few Eastern European countries. Ukraine's economy has been in tatters since its military conflicts with Russia over Crimea.
• In July 2016, UniCredit sold a 10% stake in its Polish subsidiary Bank Pekao for EUR 749-million (USD $830-million, PLN 3.3-billion). Following the sale, UniCredit still holds a 40.1% stake in the Polish bank. Italy's banking sector has been battered by the 2008 global credit crisis and the sale is part of the strategy to bolster the Italian bank's capital ratio
• In July and October 2016, UniCredit sold a total of 30% of FinecoBank SpA for EUR 880-million (USD $969-million). Following the sale, UniCredit's stake in FinecoBank was reduced to 35% from 65%. UniCredit inherited the direct bank when it took over Capitalia.
• In December 2016, UniCredit fully divested its remaining 32.8% stake in Polish bank Bank Pekao to Polish insurer PZU and a Polish development fund for PLN 10.6-billion (EUR 2.57-billion). The sale boosted ailing UniCredit's capital and at the same time, returned a major Polish bank to Polish control, which had been a new Polish government policy for some time.
• Later in December 2016, UniCredit also sold its Pioneer Investment subsidiary to France Amundi Asset Management for EUR 3.545-billion (USD $3.72-billion). Pioneer Investments had EUR 222-billion of assets under management. Amundi is on the Paris Stock Exchange but majority-owned by French bank Crédit Agricole.
• In July 2021, UniCredit announced that it was in talks to acquire the 64% stake of ailing Italian rival Banca Monte dei Paschi di Siena (MPS) from the Italian government, on the condition that the Italian state take up the liability of MPS' bad loans. However. talks ended in October 2021, when the Italian Treasury valued the components of MPS selected by UniCredit to be worth between EUR 3.6-billion and 4.8-billion, but UniCredit was only offering EUR 1.3-billion.
• In September 2024, UniCredit acquired a 9% equity stake in Germany's Commerzbank, a 4.5% stake from the German government and 4.5% from public shareholders. Shortly after that, UniCredit disclosed that through the use of derivatives, it controlled a potential 21% economic stake in the German bank, skirting the regulatory approval normally required when controlling more than a 9.9% interest in a German financial institution. UniCredit was seeking approval from the authorities to buy up to 29.9% of Commerzbank. German law requires a full mandatory takeover offer be made when ownership surpasses the 30% threshold. Key ownership thresholds, including 10%, 20%, 30%, and 50%, all require approval from the ECB. However, German Chancellor Olaf Scholz and top Commerzbank executives have come out expressing strong opposition to UniCredit's takeover proposal to create a massive cross-border European bank as "an unfriendly attack."
• In November 2024, UniCredit offered to take over Banco BPM for EUR 10.1-billion (USD $10.6-billion) in stock. In terms of assets, UniCredit is about four times as large as Banco BPM. However, as of mid-2025, it was believed that the chance of UniCredit's success in pursuing Banco BPM was low.

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Italy Bank Mergers & Acquisitions (UniCredito / UniCredit Page 2)

Photo: The beautiful entrance to a Cassa di Risparmio di Torino (later Banca CRT) branch in Turin. Banca CRT became part of UniCredito in 1995. Then in 1998, Credito Italiano bought UniCredito to form UniCredito Italiano (now known as UniCredit).

Photo source: Jan-Tore Egge of Norway. You can see Mr. Egge’s other photos via this link: http://www.flickr.com/photos/jan-tore/


UniCredito SpA

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.

Recent transaction(s):

• 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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Germany Bank Mergers & Acquisitions (HypoVereinsbank)

Photo: HypoVereinsbank’s (HVB Group) head office building Hypo-Haus in Munich, Germany.
Photo source: UniCredit HVB's web site.

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HVB Group and its Bank Austria Creditanstalt subsidiary were taken over by Italy's UniCredit SpA in 2005.



HypoVereinsbank / HVB Group AG (a subsidiary of Italy's UniCredit SpA)


Bayerische Hypotheken- und Wechsel-Bank (Hypo-Bank)

In 1835, King Ludwig I of Bavaria signed a decree authorizing the establishment of Bayerische Hypotheken- und Wechsel-Bank (“Bavarian Mortgage and Exchange Bank”). As its name suggests, the bank’s main focus was on mortgage lending and commercial lending (discounting bills of exchange for businesses). The bank made its first securities underwriting deal in 1879 when it participated in a syndicated bond issue to finance the Bavarian railroad.

In 1889, Bayerische Hypotheken- und Wechsel Bank joined the much larger Deutsche Bank, Disconto-Gesellschaft and other partner banks to create the Deutsch-Asiatische Bank in the Chinese port city of Shanghai. China during the late 19th century was very weak and foreign countries seized the chance to impose preferential trading rights and to establish colony-like territories in China for their industrial and commercial exploitation. Deutsch-Asiatische Bank was only one of a dozen or so British, French, Belgian, Dutch, German, Russian, Portuguese, Scandinavian, Japanese and American banks that created subsidiaries in China to further the economic interests of their home countries.

By 1908, Hypo-Bank (as Bayerische Hypotheken- und Wechsel-Bank was commonly known) had become the leading mortgage lender in the country but Germany soon plunged into 50 years of turbulence. The outbreak of World War I in 1914 embroiled Europe, Africa and the Middle East in deadly battles as rival European powers and the Ottoman Empire invoked defence alliances and declared war upon each other and their overseas colonies. The four-year war led to some 35 million casualties and ended four major imperial powers, including the German Empire.

After its defeat, Germany suffered a decade of economic and social turmoil. In 1922, radical currency devaluation and a massive increase in money supply led to the infamous hyper-inflation, which made the German mark practically worthless. The hyper-inflation then fuelled a consumption boom, as consumers and businesses alike would rather fully spend the paper money that they received daily, than to hold on to it overnight when it was worth even less the following day. The sky-high inflation rendered Hypo-Bank’s main business of mortgage lending meaningless, as repayments made by borrowers became worthless to the bank due to the much diminished purchasing power of money. Meanwhile, in order to pay the Treaty of Versailles reparations, Germany borrowed heavily from foreign banks and creditors during the 1920s.

Conditions worsened as the 1920s drew to a close when the American stock and real estate markets crashed in October 1929. Foreign creditors withdrew their credit to Germany as loan losses mounted. Then in May 1931, Austrian bank Credit-Anstalt became insolvent due to years of excessive lending, poor management and the cruimbling economy, sending more shocks to the German public. In July, the panic reached its peak in Germany and led to a general run on the nation’s banks. The government imposed a forced, two-day shutdown of all banks on July 14 and July 15, 1931, to restore order in the banking industry.

Ironically, it was the rise of Nazism and rearmament spending that lifted the German economy in the mid-1930s. Lives and economic development were once again devastated across the world by World War II, when Japan invaded China in 1937, and Germany invaded Poland in 1939.

Hypo-Bank wrote off numerous mortgage loans and properties as millions of people were displaced and cities and towns were destroyed during the war. Peace returned in 1945 but things only slowly began to improve in 1947 after the signing of the European Recovery Plan (commonly known as the Marshall Plan), which saw the United States providing USD $12-billion in aid for Western Europe to rebuild the devastated areas. As the German economy boomed, Hypo-Bank greatly expanded its network of branches in the 1960s and 1970s. In the 1980s, the bank formed alliances with other European banks to offer syndicated loans internationally. These alliances allowed smaller European banks to participate international financings that were otherwise too big and too risky for them to offer on their own individually.

The year 1990 was an important one for German history as the collapse of the communist Soviet Bloc led to the reunification of the two Germanys. Hypo-Bank moved aggressively into the East German mortgage market in the early 1990s, a move that the bank would later regret. The bank, however, made the right move by also entering the Eastern European market. In 1992, it set up a subsidiary in Czech Republic; one year later, more subsidiaries were created in Hungary, Poland and Slovakia.


Bayerische Vereinsbank

In 1869, King Ludwig II of Bavaria granted a licence to a group of Munich private bankers to establish the Bayerische Vereinsbank. The bank set out to serve the rapidly industrializing Bavarian economy. In 1870, it issued a loan to finance the building of the Bavarian railway and one year later, began to issue real estate loans. For the next 100 years, Bayerische Vereinsbank remained largely regional in nature compared with the Berlin-based grossbanken (Big Banks) such as Deutsche Bank and Dresdner Bank.

Following World War I, the German economy went into a tailspin and Bayerische Vereinsbank responded by forming alliances with several banks in Berlin and Bavaria. These alliances typically involved cross-minority-shareholdings between the smaller banks, as well as cross-representation on each other’s boards of directors. By adopting this strategy, these smaller banks were able to preserve their independence by making themselves unpalatable to the grossbanken, and yet the alliances allowed them to assist each other financially in times of crisis.

In the aftermath of World War II, the grossbanken like Deutsche Bank, Dresdner Bank and Commerzbank were found guilty of war crimes in financing the Nazi war machine and were broken up into many smaller banks. Regional banks like Bayerische Vereinsbank and Bayerische Hypotheken- und Wechsel-Bank were spared and allowed to operate freely. In 1969 Bayerische Vereinsbank first proposed to combine with its rival Bayerische Hypotheken- und Wechsel-Bank to compete with the grossbanken. Talks however broke off in 1971 when the Bavarian state government insisted that the Bayerische Staatsbank be part of a three-way merger. Subsequently, Bayerische Vereinsbank did end up acquiring Bayerische Staatsbank alone.

In the 1970s Bayerische Vereinsbank finally forayed into the international scene when offices were opened in Rio de Janeiro, Tokyo, Tehran, New York, Chicago, Paris, Johannesburg, London and Hong Kong.

In 1989, Bayerische Vereinsbank joined four other Western European banks (Austria’s Creditanstalt-Bankverein, Banca Commerciale Italiana, France’s Credit Lyonnais and Finland’s Kansallis-Osaki-Pankki) as well as three state-owned Soviet banks (Vneshekonombank, Sberbank and Promstroibank) to establish the International Moscow Bank. It was the first ever Soviet-based bank funded partly by western capital. (Both Bayerische Vereinsbank and Creditanstalt-Bankverein became part of the HVB Group, and HVB Group and International Moscow Bank both became part of UniCredit.)

Recent transaction(s):

• In 1992, Bayerische Vereinsbank acquired Austria’s Schoeller & Co. Bank, a private bank with 13 branches.
• In 1997, Bayerische Vereinsbank and Bayerische Hypotheken- und Wechsel-Bank announced their merger agreement. The move was to pre-empt a rumoured takeover of Bayerische Vereinsbank by Deutsche Bank and of Bayerische Hypotheken- und Wechsel Bank by Dresdner Bank. The merger was completed in 1998 and the new bank took up a new name: Bayerische Hypo- und Vereinsbank, to be commonly known as HypoVereinsbank.
• Between 1998 and 1999, HypoVereinsbank acquired majority control of Poland’s Bank Przemyslowo-Handlowy (BPH); HypoVereinsbank then merged its own Polish operations BV Polska and Hypo-Bank Polska into the newly-acquired BPH.
• In 2000, HypoVereinsbank acquired Bank Austria Creditanstalt (BA-CA) for Euro 7.8-billion (USD $7.3-billion). BA-CA was Austria’s largest bank with 280 domestic branches, plus another 400 branches across Central and Eastern Europe.
• In 2001, HypoVereinsbank merged its own Polish operations BPH with Bank Austria Creditanstalt’s Polish subsidiary Powszechny Bank Kredytowy (PBK) to form BPH PBK S.A., one of the largest banks in the country.
• In 2001, HypoVereinsbank transferred its Central and Eastern European operations to its BA-CA subsidiary.
• In 2002, Bayerische Hypo- und Vereinsbank changed its name to HVB Group.
• Also in 2002, HVB’s BA-CA subsidiary bought Bulgaria’s Bank Biochim.
• Also in 2002, HVB’s BA-CA subsidiary bought 62.6% of Croatia’s Splitska Banka from UniCredito Italiano for Eur 94-million. In 2005, Splitska Banka became part of UniCredito Italiano once again when the Croatian bank's parent HVB Group was taken over by UniCredito Italiano.
• In 2003, amidst mounting loan losses at HVB Group due to a wave of corporate bankruptcies resulting from the “tech bust” and the September 11 fallouts, HVB raised Euro 958-million cash by re-floating 22.5% of Bank Austria Creditanstalt on the Vienna and Warsaw stock exchanges.
• In 2004, HVB’s BA-CA bought Bulgaria’s Hebros Bank.
• Also in 2004, HVB’s BA-CA bought Serbia’s Eksimbanka.
• Also in 2004, HVB Group contributed 2/3 of a USD $100-million capital injection for International Moscow Bank and raised its stake to 52.9%, wrestling control of the Russian bank from its other Swedish and French minority shareholders.
• In 2005, UniCredito Italiano bought HVB Group for Euro 15.4 billion (USD $19.4-billion). In addition, UniCredito Italiano also made an offer to buy out the 22.5% of Bank Austria Creditanstalt held by the public for Eur 2.63-billion, as well as the 29% of Poland's Bank BPH PBK held by the public for about Eur 1.48-billion. The three offers totalled about Eur 19.5-billion (USD $24.5-billion). HVB Group already owns 77.5% of Bank Austria Creditanstalt and 71% of Bank BPH PBK.
• Subsequently, however, the Polish banking regulator vetoed UniCredito Italiano's bid to privatize Bank BPH PBK for Eur 1.55-billion. UniCredito Italiano withdrew its offer for the Polish bank in early 2006, but still indirectly held 71% of the bank through its acquisition of Germany's HVB Group.

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Italy Bank Mergers & Acquisitions (Credito Italiano, UniCredit Page 1)

Photo: Architectural details above the entrance to an old Credito Italiano branch in Rome.

Photographer: Smeerch

You can view Smeerch's other photos via this link on flickr: http://www.flickr.com/photos/smeerch/

This page contains information on the genealogy of Credito Italiano up to its merger in 1998 with UniCredito to create UniCredito Italiano (now known as UniCredit SpA).


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 "mount" 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 pietà 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, though a few private-sector commercial banks did exist, such as the Banca Commerciale Italiana, Credito Italiano and Banca di Roma.

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.

Credito Italiano

Credito Italiano’s predecessor Banca di Genova was founded in 1870 by a number of Genoa’s prominent citizens. By 1872, the young bank had already established a subsidiary in Buenos Aires to provide trade finance between Italy and Argentina. However, the good times didn’t last long: Italy plunged into a serious economic and banking crisis in the 1890s and many banks failed. Banca di Genova “survived” only when several German banks stepped in to re-capitalize it in 1895 as Credito Italiano. By 1905, the re-born bank had opened branches in Rome, Florence and Naples. The bank relocated its head office from Genoa to Milan in 1907 and opened a London office in 1911.

Throughout the early 20th century, Credito Italiano attracted several prominent industrialists as major shareholders, including Giovanni Battista Pirelli, founder of the Pirelli rubber and telegraph cable maker, and Giovanni Agnelli (the senior), founder of the FIAT automotive empire.

In the 1920s, Credito Italiano made equity investments in several Romanian, Austrian, Czechoslovakian and Albanian banks. Towards the end of the decade, however, the global economy collapsed after the 1929 New York stock market crash. In 1930, at the request of the Italian government, Credito Italiano took over the ailing Banca Nazionale di Credito, the No. 3 bank in the country at the time.

In 1933, the worsening banking crisis was on the verge of collapse. The Italian government stepped in and named the top three banks (Banca Commerciale Italiana, Banco di Roma and Credito Italiano) as “banks of national interest.” They were then nationalized and placed under a state-owned holding agency called the Istituto per la Ricostruzione Industriale (IRI).

When World War II broke out, Italy under fascist Benito Mussolini’s regime joined Nazi Germany and Japan’s imperialist government to invade their neighbouring countries. Not surprisingly, all of Credito Italiano’s overseas operations were shut down.

Following the end of World War II, Credito Italiano, Banca Commerciale Italiana and Banco di Roma in 1946 jointly established Mediobanca - Banca di Credito Finanziario, a specialized lender providing medium- and long-term financing to rebuild the devastated economy. Mediobanca’s direct equity investments in many of Italy’s most well-known industrial, commercial and financial concerns made it a secretive, powerful and manipulative deal-maker in orchestrating mergers, blocking unwanted corporate advances, forcing business break-ups and even reinforcing oligopolies well into the 1990s.

In the 1960s, as Italy’s economy and exports recovered, Credito Italiano needed new capital to finance its growing clients. In 1971, the three “banks of national interest” were finally allowed to list their shares on the stock market again. During the next 20 years, Credito Italiano expanded its international operations in London, New York, Moscow, Tokyo and Hong Kong.

In 1993, Credito Italiano became the first bank controlled by state agency IRI to be privatized when a majority stake of the bank was sold to the public.

Rolo Banca 1473

(Banca del Monte di Bologna e Ravenna, Cassa di Risparmio di Modena, Carimonte Banca, Credito Romagnolo)

In 1473, the senior officials of the Republic of Bologna and the Order of the Franciscans of Primitive Observance founded the Mons Pietatis Bononiensis, the predecessor of the Monte di Pietà di Bologna, which became the modern-time Rolo Banca 1473. Like other monti, its aim was to provide credit to low-income citizens and owners of small businesses at affordable interest rates, to encourage savings, to accept deposits and to offer safe-keeping of valuables.

By the 16th and 17th centuries, the Monte di Pietà di Bologna was also providing debt-collection, payment management, land dealing, and warehousing (for the storage of hemp, silk and grains) services, as well as tax-collection on behalf of the Bolognese government.

In 1795, the invading Napoleonic forces plundered northern Italy and confiscated the monte’s coinage and assets. Seemingly destined to collapse, Monte di Pietà di Bologna survived when many of its creditors voluntarily wrote off the debts owed to them, and when fellow monti in Genoa and Rome forwarded much-needed emergency funding to their counterpart in Bologna.

In modern times, the Monte di Pietà di Bologna once again suffered severe physical and financial losses during World War II, when many branches and warehouses were destroyed. Much of the population was also wounded, killed or displaced when fascist Italy battled the Allied forces. After World War II, banking legislation changes in the 1950s led the Monte di Pietà to adopt the new name Banca del Monte di Bologna.

Also tracing its history to the late 15th century, the Monte di Pietà di Ravenna was founded by the Republic of Venice in 1492 to offer an alternate to the Jewish private bankers who catered only to noblemen. Situated along the strategic ancient trade route in northeastern Italy, Ravenna and Venice both changed hands numerous times between rival empires throughout the Renaissance and Napoleonic periods. During the 1510s and 1790s, Ravenna was twice devastated by the French army. The Monte di Pietà di Ravenna suspended operations for months in 1795 when its coffers were ravaged by the Napoleonic forces.

In modern times, the monte obtained new classification as a bank and in 1956 adopted the name Banca del Monte di Ravenna. Just one year later though, it merged with Monte di Bagnocavallo and became known as the Monte di Credito su pegno di Ravenna e Bagnocavallo.

In 1965, Banca del Monte di Bologna and Monte di Credito su pegno di Ravenna e Bagnocavallo combined to form the Banca del Monte di Bologna e Ravenna. The new bank continued to expand in the next two decades and by 1983, operated a network of 60 branches. In 1988, for the first time in its 500-year history, the bank was partially floated publicly when shares were offered to private investors.

The third major predecessor bank that became Rolo Banca 1473 was the Cassa di Risparmio di Modena, which was established in 1846 by the city council. The savings bank gained independence from the Modena municipal government in 1888. C.R. di Modena had a history of directing part of their profits towards sponsoring social housing, university education and agriculture such as the local parmesan cheese makers.

In 1989, C.R. di Modena opened a representative office in Hong Kong, and in the same year, concluded a memorandum of understanding to combine with Banca del Monte di Bologna e Ravenna. The merger was finalized in 1991 and the new bank adopted the name Carimonte Banca SpA under a parent company called Carimonte Holding. Carimonte Banca combined the strength of 110 branches from the three historic banks from Bologna, Ravenna and Modena, all of which are within the northeastern Italian region of Emilia-Romagna.

The fourth major component of Rolo Banca 1473 was Credito Romagnolo, which traces its history to the 1896 creation of the Piccolo Credito Romagnolo in Bologna. The mandate of the bank was to extend credit (loans) to catholic aid societies, all levels of social classes, small merchants and farms, and to support a local catholic newspaper. The bank dropped the Piccolo name when it ceased to be co-operative and became a joint-stock bank in 1914.

Due to its close ties with the Catholic Church and the then ruling Christian Democrat government, Credito Romagnolo in 1982 was asked to participate in the re-capitalization of the Nuovo Banco Ambrosiano – the original Banco Ambrosiano had collapsed in 1981 under USD $1.3-billion of losses following a major political scandal involving the bank, the Mafia and the Vatican. Credito Romagnolo ended up subscribing to 10% of the Nuovo Banco Ambrosiano for ITL 60-billion (Italian lira), a stake which the bank eventually sold off between 1985 and 1989 for a total of ITL 82-billion. Nuovo Banco Ambrosiano eventually became Intesa Sanpaolo.

Credito Romagnolo’s operations expanded considerably in 1992 when it took over Banca del Friuli. The Italian banking sector entered a period of frenzy consolidations in the 1990s as smaller banks positioned themselves for the desired merger partners in preparation for increased competition.

Following lengthy discussions, Credito Romagnolo and Cassa di Risparmio in Bologna agreed to merge in 1994. In October, however, Milan-based Credito Italiano launched a hostile bid to acquire Credito Romagnolo on the condition that Credito Romagnolo and Cassa di Risparmio in Bologna broke off their merger plan.

C.R. in Bologna in late 1994 formed an alliance with several other Italian financial services firms IMI, Cariplo and Reale Mutua and made a new, joint offer for Credito Romagnolo. Determined to win Credito Romagnolo, Credito Italiano in early 1995 collaborated with Carimonte Banca and insurer RAS (Riunione Adriatica di Sicurtà) and returned with a higher offer. The Credito Italiano group eventually won Credito Romagnolo.

Following a complex restructuring, merger partners Carimonte Banca and Credito Romagnolo amalgamated their operations into a new bank called Rolo Banca 1473 in 1995, whose majority holding was held by Credito Italiano.

Finally in 1998, Credito Italiano and UniCredito agreed to merge to form the UniCredito Italiano (now known as UniCredit), a mega bank with a combined market value of USD $26-billion.

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