Italy’s largest bank, Intesa Sanpaolo, formed in January 2007 out
of the merger of Banca Intesa and Sanpaolo IMI, has set in motion a
process aimed at major rationalisation of its bancassurance

Triggering rationalisation, which the bank believes offers a
“remarkable” value creation opportunity, is the unwinding of two
joint ventures (JV) in which it is a partner.

The first is Intesa Vita, a 50:50 JV with Italian insurer Generali
serving former Banca Intesa branches. The second is Centrovita
Assicurazioni, a JV with French bank BNP Paribas’ insurance unit
Cardif Assurance in which Intesa holds a 51 percent stake.
Centrovita serves the branches of Banca Firenze, an Italian
regional bank acquired by Intesa Sanpaolo in 2007.

Intesa Sanpaolo is to acquire full control of Intesa Vita and
Centrovita following decisions by Generali and Cardif to exercise
put options linked to the JVs against it.

Also forming part of the rationalisation are Intesa EurizonVita, a
99.96 percent-owned unit serving the former Sanpaolo branches, Sud
Polo Vita, a 99.97 percent-owned unit serving the branches of Banco
di Napoli, a former Sanpaolo unit, and Casse del Centro, which in
December 2008 was transferred from Intesa Sanpaolo to Banca

The objective of the rationalisation is to consolidate the
activities of the currently four separate bancassurance unit into a
single company serving Banca Intesa’s banking networks; and create
a life company to service the financial advisers of Banca Fideuram,
an investment banking and asset management specialist in which
Intesa Sanpaolo has a 74 percent stake.

Intesa Sanpaolo’s rationalisation plan faces one obstacle, Italy’s
Competition Authority, which, in its decision to authorise the
Banca Intesa and Sanpaolo IMI merger, specified that Sud Polo Vita
be sold to third parties. Intesa Sanpaolo has made representation
to the Competition Authority to have this requirement set

If the Competition Authority views the representation positively it
will enable Intesa Sanpaolo to form of a group bancassurance
business unit with, based on 2008 results, annual gross written
premium income of €8 billion ($11 billion) and technical reserves
of some €63 billion.

Intesa Sanpaolo believes planned rationalisation will yield cost
savings from unification of systems and processes and improve its
competitiveness as a result of product and investment policy

The bank serves 11.2 million customers via 6,354 branches in