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July 8, 2009updated 13 Apr 2017 8:56am

Change ahead for Intesa Sanpaolo

Italys 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 operations The first is Intesa Vita, a 50:50 JV with Italian insurer Generali serving former Banca Intesa branches

By LII editorial

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 operations.

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 Firenze.

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 aside.

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 unification.

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

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