Banco BPM Forms Alliance for Italy's E-Payments Giant

Explore Banco BPM's partnership with Gruppo BCC Iccrea and FSI to establish Numia, Italy's second-largest player in the e-payments sector.

Italy's Banco BPM (BAMI.MI) has officially sealed a strategic alliance with Gruppo BCC Iccrea and the domestic private equity fund FSI, culminating in the establishment of Numia—an entity poised to become Italy's second-largest player in the burgeoning e-payments sector. This development was disclosed in a joint press release issued on Tuesday, following the initial announcement of the partnership back in July.

With a projected domestic market share exceeding 10%, this collaboration has successfully navigated the labyrinth of legal and regulatory approvals requisite for its consummation, as articulated in the statement. Banco BPM, currently the third-largest banking institution in Italy, alongside Iccrea, will each command a 28.6% equity stake in the Numia group, which oversees the operations of Numia. Meanwhile, FSI will hold a substantial 43% stake, thereby solidifying its influence in this venture.

In a rather lucrative exchange for its asset contribution to this ambitious project, Banco BPM is set to receive a staggering 500 million euros (approximately $556 million), which includes an upfront cash infusion exceeding 200 million euros, supplemented by potential deferred price components that could reach up to 80 million euros. This financial maneuver is expected to yield a favorable impact of approximately 88 basis points on Banco BPM's fully loaded Common Equity Tier 1 (CET1) ratio, attributable to the immediate capital gain. However, it is noteworthy that the 28.6% stake held by Banco BPM will concurrently result in a reduction of its CET1 ratio by 49 basis points, as highlighted in the press release.

In the broader context of the European payments landscape, Italy's Nexi (NEXII.MI) continues to reign supreme as the continent's largest payments group, measured by the volume of transactions processed. This competitive dynamic underscores the significance of Numia's entry into the market, as it seeks to carve out its niche amidst established players.