Banks surge on the Milan Stock Exchange amid ECB rate hike and risk aversion

(Il Sole 24 Ore Radiocor) - The ECB rate rise and risk appetite are boosting bank shares on the Milan Stock Exchange. Buying is particularly strong in Mediobanca , Unicredit , Banca Monte Paschi Siena and Intesa Sanpaolo , but Finecobank , Banca Mediolanum , Bper Banca and Banco Bpm , as well as Unipol .

The ECB’s move, which had already been priced in by the market, will help credit institutions maintain their revenues, easing the downward pressure on net interest income. On the risk front, however, attention remains very high, whilst observers are considering the possibility of counter-moves following the launch of Intesa Sanpaolo’s takeover bid for MPS, which aims to reshape the balance of the Italian financial system.

Whilst a renewed bid from Banco BPM – which, just a few hours before Intesa’s move, had sent MPS a proposal to explore a merger of equals – appears difficult from a financial perspective, some analysts do not rule out a possible ‘joint’ response with an industrial partner, looking in particular to the French partner Crédit Agricole. In recent days, however, experts at Deutsche Bank had dismissed the arrival of a counter-offer as a “remote possibility”, whilst not ruling out a potential upward revision of Intesa’s proposal to close the deal, as has happened in the past, for example in the Ubi Banca transaction. All eyes are also on the moves of UniCredit which, whilst tightening its grip on Germany’s Commerzbank, could assess its market position in Italia, perhaps even looking once again towards Banco BPM following last year’s failed takeover attempt.