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#CreditAgricole purchase of Italian savings banks delayed to September

The purchase by France’s Credit Agricole (CAGR.PA) of three small Italian savings banks has been delayed to September, as a domestic banking fund and other investors need to fork out more money to buy the lenders’ bad loans and cover for the ensuing losses, two sources close to the matter have said.

The French bank said in April it was in talks with the Bank of Italy and the country’s Interbank Deposit Protection Fund to acquire the Cesena, Rimini and San Miniato savings banks.

The deal was expected to be closed this week, but the sources said it had been postponed until after the holiday season as some details still needed to be sorted out.

Credit Agricole is buying the three banks for 130 million (116.08 million pounds sterling) but wants them cleaned up from their bad loans, which total 3 billion on a gross basis.

The Italian fund that guarantees deposits is expected to inject a further 95m mostly to cover losses resulting from the sale of the bad loans, one of the sources said.

At least another 300 million euros are needed from investors to complete the securitization of the mezzanine tranche of the banks’ bad loans, according to the sources.

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Category: A Frontpage, France, Italy

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