Rome (Reuters) – The Italian government wants to make it easier for domestic banks to merge with one another.
It is planned to extend tax advantages for mergers of institutions and the reduction of risky loans until mid-2022, according to a bill submitted to the Reuters news agency. The tax breaks expired in December. This could make it easier for Unicredit to take over the crisis-ridden rival Monte dei Paschi. The talks about it had recently stalled because of the change of boss at Unicredit.
A takeover of Monte Paschi by Unicredit is the way favored by the Italian government to get out of Monte Paschi. She had backed the institute with billions because it nearly collapsed under a load of bad loans. Ex-Unicredit boss Jean Pierre Mustier had resisted a takeover, his successor Andrea Orcel is, according to insiders, open to it.
The new tax law would bring Unicredit an advantage of 3.4 billion euros if it works with the Monte Paschi takeover, calculated analyst Andrea Lisi from the broker Equita. If Unicredit and Banco BPM merge, the savings would be even higher.
Thanks to the tax breaks, banks in Italy were able to get rid of 33 billion euros in bad loans last year alone, as a study by the Italian central bank shows. According to an insider, the government plans to discuss the bill on Friday.
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