Trade the Banco BPM share!
BANCO BPM

Analysis before buying or selling Banco BPM shares

Trade the Banco BPM share!
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Elements to consider before selling or buying Banco BPM shares

Analysis N°1

First of all, it will of course be necessary to examine the strategy implemented by this banking group with the aim of diversifying its activities with the creation of new products and services but also with the disposal of the least profitable activities in order to favour high margin activities.

Analysis N°2

We will also keep an eye on the distribution of assets held and managed by the group with the various risks that this may entail and, above all, the adequacy of these assets and their positioning in relation to European banking rules.

Analysis N°3

Of course, part of this analysis will also have to be based on the news from the European Central Bank and in particular on the evolution of interest rates in the euro zone, which can influence the credit and savings sector.

Analysis N°4

We will also closely follow the operations aimed at further internationalising the group's activities with the acquisition of banks or specific operations abroad or the implementation of strategic partnerships with companies in the rest of the world.

Analysis N°5

Finally, the competition in this sector of activity will also be closely monitored by consulting the market share distributions between the various players in this field and the major news likely to change them.

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General presentation of Banco BPM

The Banco BPM Group was created by the merger in 2017 of Banco Popolare and Banca Popolare di Milano. This makes it the third largest banking group in Italy. It offers retail banking, investment banking, capital markets, corporate and investment banking, private banking and asset management.

Banco BPM has over 2,500 branches in Italy.

Analysis before buying or selling Banco BPM shares
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The major competitors of Banco BPM

Let us now look at the sectoral environment of the Banco BPM Group and more specifically at its main competitors on the market with a more detailed presentation of the latter:

Unicredit 

The Unicredit Group is an Italian banking group that has existed since 1998 and is based in Milan. It is also one of the leading banks in Italy, particularly in terms of assets, but also one of the largest market capitalisations in the eurozone in this sector since its takeover of hypoVereinsbank in 2005. The group operates over 8,954 branches and currently employs over 148,000 people.

Intesa Sanpaolo 

This other Italian bank is the largest in the country and has over 12 million customers. It dominates the Italian market and has a strong international presence, particularly in Central and Eastern Europe and the Mediterranean basin.

Banca Monte di Paschi di Siena or MPS

This other Italian bank is the oldest bank in the world still in operation and was established in 1472 in Siena, Tuscany. It has been in operation ever since and is one of the leading Italian banks in terms of assets.

UBI Banca

Finally, we must also take into account the competition from the UBI Banca group, an Italian bank created in 2007 from the merger between Banche Popolari Unite and Banca Lombarda e Piemontese.


The major partners of Banco BPM

Let us now turn to Banco BPM's strategic allies with a presentation of two concrete examples of strategic partnerships recently established by the company:

Crédit Agricole 

The first partnership we are going to talk about was signed in 2020 between Banco BPM and Crédit Agricole with an agreement that strengthens their overall partnership in consumer finance in Italy through the Agos Ducato joint venture owned 61% by CACF and 39% by Banco BPM. This agreement adds some developments to the agreements signed in 2018 regarding additional capacity for Agos Ducato that will allow it to further expand its commercial base and improve its refinancing cost. The agreement also provides for the extension until 2023 of the deadline for exercising an option for Banco BPM's 10% stake in Agos Ducato at the initially agreed exercise price of EUR 150 million.

Cattolica Assicurazioni

Previously, the group had also decided to terminate a joint venture with Cattolica Assicurazioni with the decision of the group's CEO to exercise his call option on the two bancassurance joint ventures with Cattolica, hinged on the change of control clause. Banco BPM's share price has thus gained in popularity after this operation as it has given it more freedom in the bancassurance segment in 2021.

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Positive factors for Banco BPM shares
The factors in favour of a rise in the Banco BPM share price:

With CFDs on online trading platforms, you have the opportunity to invest in both the rise of an asset or its fall. In the case of the Banco BPM share, in order to choose the direction in which you are going to take a position, you must base your strategy on a complete analysis of this group. The best way to do this is to know its strengths and weaknesses in order to determine how it can develop its activities and profitability over the long term. We will therefore help you in this task by summarising the advantages and disadvantages of this business. We will first look at the strengths of this group and then discuss its weaknesses.

  • Firstly, it should be remembered that this bank is considered to be a local bank in the sense that it has more than 600 branches, which are all privileged points of contact with the customers of this banking network. Banco BPM also has some fifteen private banking centres in Italy. In total, the Banco BPM Group has no fewer than 30,000 custodian customers in the retail segment alone. In addition to retail customers, more than 1.4 million people use Banco BPM's services in Italy.
  • Banco BPM has also managed to stand out from the Italian competition thanks to the development of its online banking services. Indeed, customers who have an account with this bank can now manage it digitally, which is a real plus in terms of loyalty and also in terms of recruiting new prospects, particularly with a younger target group.
  • Of course, the Banco BPM Group can also rely on its workforce to ensure its profitability and future activities. The bank currently employs over 6,000 people in its various branches. It also places great emphasis on training its employees, who are thus able to respond consistently to the demands of all customers and thus make the relationship of the latter with their advisors stronger.
Negative factors for Banco BPM shares
The factors in favour of a drop in the Banco BPM share price:

We have just reviewed all of Banco BPM's strengths, which should enable it to maintain its strong position in the years to come. While these strengths are numerous and can influence bullish strategies on this stock, it is important to temper this overly hasty judgement by taking into account the possible obstacles to this growth. Banco BPM also has its weaknesses and you should therefore be aware of the factors that could have a negative influence on the share price in the months and years to come. Here they are in detail.

  • One of the main weaknesses of this banking group is its high attrition rate. In recent years, many highly qualified employees have left the group, partly because of higher remuneration levels in the competition. This could affect the quality of the services and the quality of the marketing strategy of the company and thus hamper the profitability of this group in the long term.
  • The group's geographical positioning is also regrettable, as it is currently focused on Italy, while competing Italian banks are gradually expanding their activities to other European countries and even internationally. For the time being, Banco BPM does not seem to be implementing any expansion strategy outside of Italy and this of course exposes it to a higher risk. It is known that Italy is still suffering the consequences of the economic crisis and that its general situation is struggling to recover. Banco BPM does not have a back-up market to secure its profits and turnover. It is never a good idea for a bank to remain in a single geographical area, and the bank has all the assets it needs to expand.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How is the Banco BPM Group positioned in the Italian market?

The Banco BPM Group operates mainly in Italy. However, it is not present in Trentino-Alto Adige. However, it is the largest banking group in Lombardy with a market share of 15%. At present, the Banco BPM group has a national market share of 8.2% and more than 4 million customers. It operates more than 2,300 branches and employs around 23,000 people.

What financial data should be analysed for the Banco BPM share?

If you want to trade on the Banco BPM share price, you need to know the latest financial results of this group. Here, we will focus in particular on the net banking income, which was €4,161,700 in 2019, the general operating expenses, which amounted to €2,335,097 for the same accounting year, and the gross operating income, which was €1,557,654, again in 2019. You can of course consult these data directly on the website of this bank.

When did Banco BPM merge with Banco Popolare?

In 2016, after lengthy negotiations, Banco Popolare and Banca Popolare di Milano merged, creating Banco BPM, the third largest Italian bank. The new group is based in Milan and Verona and its capital is divided between the two companies, 54% for Banco Popolare and 46% for BPM.

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