Banks were in the spotlight in Europe again on Friday, sending the FTSE Eurofirst 300 0.1 percent higher on both the session and the week, to close at 1,359.21.
The major news of the week was a possible merger of Banca Intesa and Sanpaolo IMI in Italy. It was learned Friday that the boards of the two banks will meet on Saturday to discuss the possibilities for a deal. Many major shareholders have already expressed approval of the idea, including Credit Agricole, Intesa’s biggest shareholder. Additionally, analysts predicted a minimum of regulatory complications for such a merger. Santander, owner of 8.4 percent of Sanpaolo had no comment, except to say that a sale of its stake would bring it a €1.2 billion capital gain.
Credit Agricole was 1.4 percent higher on the week to €32.44, Intesa gained 6.4 percent to €5.066, and Sanpaolo added 9.4 percent to €16.101. Santander, meanwhile, dropped 0.7 percent to €12.
If the Intesa/Sanpaolo merger materializes, some analysts estimate that up to 300 branches could be sold, with Capitalia and UniCredit as possible purchasers. This news produced mixed results as Capitalia added 5.3 percent to €6.98, but UniCredit declined by 3.4 percent to €6.093.
All of the mergers and acquisitions speculation coming out of Italy heightened talk of takeovers in the wider European banking sector. In France, Natexis Banque Populaires was 2.6 percent higher to €202.30. Commerzbank, a frequent target of takeover speculation, was up 5.3 percent to €27.12.