As the organizer of the first bank merger in 1989, he handled multiple bank combinations during his twenty-five year tenure as head of one of the most important banking groups in Italy. He developed an organizational and corporate structure that was launched in 1992 with the merger of the Banco di Roma (B.d.R.), the Cassa di Risparmio di Roma (C.R.R.) and the Banco di Santo Spirito (B.S.S.) and supported the acquisition of Mediocredito Centrale and the Banco di Sicilia in 1999, the merger of the Bancaroma Group and the Bipop Carire Group into the Capitalia holding company in 2002 and finally the establishment of the banking giant Unicredit-Capitalia on 20 May 2007, which became effective on 1 October 2007.
The following chronology of events traces the history of bank combinations leading up to the establishment of the Unicredit/Capitalia Group with a market capitalization of 96.7 billion euros.
Establishment of the Banca di Roma
The original strategic design called for the combination of a wide and consolidated collection area, strong regional involvement and the operational capability of a large bank having an international influence. The establishment of the Banca di Roma was the first real bank merger to be achieved before the end of the nineties.
The first stage of the combination process took place between 1989 and 1992 and lead to the establishment of the Banca di Roma.
Upon completion of the transferof C.R.R. assets to the B.S.S. (1 March 1991) the merging process continued under law no. 218 dated 30 July 1990 (the so called “Amato” Law) and legislative decree no. 356 dated 20 November 1990.
In 1992, the IRI (Istituto per la Ricostruzione Industriale or Industrial Reconstruction Organisation) and the Ente Cassa di Risparmio transferred the controlling blocks of the B.d.R. and the B.S.S., respectively, into a holding company (Società Italiana di Partecipazioni Bancarie – S.I.P.A.B. S.p.A. that would change its company name to the Cassa di Risparmio di Roma Holding S.p.A. in April of 1992).
The subsequent merger through acquisition of the B.d.R. and the B.S.S. was completed on 1 August 1992, and the acquiring bank was immediately assigned the name, Banca di Roma S.p.A. The resulting banking institution controlled a network of approximately 1,100 branches, 24,000 employees and held total assets (the sum of the total activity of the two banks on December 31, 1991) of 139,449 billion lire.
From the beginning, the new bank focused on consolidating the integration of each original institution and developing business, strengthening its presence in retail banking and expanding the range of services offered to its clients. The bank also worked to eliminate the redundant elements in its branch network, adopted staff reduction policies and introduced rigorous risk assessment and control procedures. Finally, it concentrated on widening its presence in areas such as investment, private banking and insurance.
Acquisition of the Banca Mediterranea and the Banca dell’Agricoltura
In February 1995, the Banca di Roma acquired a stake of 51.95% of the Banca Mediterranea capital, a regional bank with locations primarily in Puglia and Basilicata with recorded assets of 4,113 billion lire and 85 branches as at 31 December 1994.
In April 1995, the Banca di Roma purchased 48.26% of the ordinary shares of the Banca Nazionale dell’Agricoltura (equal to 35.53% of its share capital), a national bank with a strong presence in the Emilia Romagna and the Marche regions. The acquisition was completed via the purchase of the holding company Bonifiche Siele Finanziaria S.p.A. for 958 billion lire. The three credit institutions maintained their individual branch networks to support the various regions of the country where they were located, while also undergoing an integration of certain services such as operational procedures and technological and administrative support.
Privatisation of the Bancaroma Group
In 1997, following the agreement on 5 November, between the Ente Cassa di Risparmio di Roma and the IRI, the Cassa di Risparmio di Roma Holding company was liquidated and transferred its shares in the Banca di Roma to its Shareholders (the Banca di Roma then took the place of the Cassa di Risparmio di Roma Holding company as head of the banking group, Bancaroma). A merger of shares and bonds was thus carried out, during which the IRI disinvested its stock and the Cassa di Risparmio di Roma reduced its stake to approximately 27% and was joined by new shareholders: first Toro Assicurazioni and then EDS via subscription to shareholders’ agreements on 6 November 1997 and 27 April 1998 respectively.
When discussing the privatisation of the Banca di Roma, it’s easy to fall into triumphal tones. The bank’s success easily exceeded the expectations of all involved parties, and especially the IRI, which collected a good 83 billion for each percent of the shares it held in the Bank, for a total of 1,900 billion both from the sale of cash shares and the assignment of convertible bonds.
The success of the investment, which attracted a good 292 thousand new stockholders, was the result of genuine teamwork. The advertising campaign by J.W. Thompson, whose neologism, “Snafùz”, has now become part of modern lingo, captured the attention of investors
Bank executives also played a significant role in the success of the privatisation. The largest part of its subscriptions actually took place at the group’s approximately 1,600 branches throughout the national territory. However, assuming the success of the operation was thanks only to executives and top management would be inaccurate as the entire organization actively participated in reaching the bank’s objectives in the best manner possible.
The second phase of combination: geographic and operational diversification
The combination with Mediocredito Centrale in December 1999 permitted the group to extend its operational control to all financial intermediation sectors. The immediate inclusion of the Banco di Sicilia enabled the group to consolidate its market shares and increase regional diversification.
The operation facilitated the group in acquiring a significant share of the Sicilian banking and capital market, an area offering great growth potential in financial products and bank insurance. With Mediocredito Centrale, the group worked to widen the distributive channels of the Bancaroma network by increasing profitable commercial outlets for innovative financial and business products and services. Further international developments were also in the works with an offer from the Dutch group, ABN AMRO.
The new Bancaroma Group model (23 January 2002) included the centralization of governing departments into a holding company through a bank statute (B.d.R. Holding company), which involved the definition of the group policies and the operational standards of its constituents and the rationalization of headquarters. The holding company was made effective following the subsequent B.d.R. and Bipop merger.
The merger with the Bipop-Carire Group in July 2002 represented an additional and crucial step toward restoring the regional balance of both branch networks and the related jobs as well as facilitating a wider diversification of risk.
The acquisition by the Bancaroma Group in 2002 fully re-established the functional organization within Bipop, restoring a regulation system focused on operational transparency and procedural integrity. A new statutory and regulatory structure and a new system for the delegation of power were defined, internal monitoring was reorganized and a risk management department instituted, building the foundations for greater potential growth and the commercial reestablishment of the acquired Group.
Subsequently (1 July 2002), the Banca di Roma and Bipop respectively changed their company names to Capitalia Spa and Fineco Spa.
At its establishment, Capitalia was the 4th largest Italian banking group, with over 1,900 branches, 5 million customers, 80 billion euros in credits to customers and 81 billion in customer deposits.
Capitalia Shareholders’ Agreement
Following the dissolution of the Agreement between the Cassa di Risparmio di Roma Foundation, Toro Assicurazioni and ABN AMRO, on 22 October 2003, a new shareholders’ agreement was defined between certain Capitalia shareholders, primarily Italian and foreign industrial and financial organizations as well as several other important institutions. The three-year block and voting shareholders’ agreement, was assigned shares equal to 29.579% of the share capital.
The final merger with Unicredit
On 30 July 2007 the Extraordinary General Meeting of Capitalia shareholders approved the merger through acquisition of Capitalia S.p.A. into Unicredit S.p.A.
The merger between Capitalia and UniCredit symbolized the union of two successful, and in some ways quite similar, stories of banking combination. Capitalia had reached its maximum level of organic growth. The combination with UniCredit provided Capitalia with the possibility of becoming part of a large and dynamic European banking group, thus taking a giant leap into the international scene. On another scale, UniCredit had shown the same motivation for growth during those years and the courage to work in still immature economies, especially those abroad.