MILAN — Italy’s third-largest bank Banco BPM is keen to generate greater value longer-term from its retailers’ payment business as it explores strategic options for the unit, its chief executive said on Saturday.
Speaking to reporters on the sidelines of the Assiom-Forex conference in Milan, Chief Executive Giuseppe Castagna said Banco BPM was considering ways to boost profitability at its business that provides payment services to shopkeepers.
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Most Italian banks have sought a partner for such businesses, known as merchant acquiring, selling their operations in full or in part.
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In the latest such deal, Italy’s payments champion Nexi last year agreed to buy the shop payments business of BPER Banca and its Banco Di Sardegna unit in a deal worth up to 384 million euros.
Castagna appeared to rule out an outright disposal.
“What we certainly won’t do is be selling future P&L (profit and loss) inflows to get cash upfront,” Castagna said.
When banks sell fee-yielding businesses, they pocket upfront discounted future revenue flows which the buyer will get back over time from the acquired operations.
“Like with our other businesses, we’re looking for … a model that creates more value for the bank,” Castagna said without elaborating.
Banco BPM recently agreed to sell a majority stake in its non-life insurance business to Credit Agricole, its single biggest investor with whom it already partnered in consumer credit. (Reporting by Andrea Mandala and Valentina Za Editing by Keith Weir)
