Citicorp Said to Be Mulling Sale of Consumer Unit in Italy
LONDON - Citicorp is evaluating whether to sell its Italian consumer banking subsidiary, according to knowledgeable bankers in Italy.
Financial newspapers in Italy have suggested in recent days that both Deutsche Bank AG of Germany and Italy's Banco Ambrosiano Veneta had made offers for Citicorp Italia, which has 52 branches across Italy with assets of about $2 billion.
A spokesman for Citibank Italia in Milan declined to comment on the reports.
And the Italian bankers, who requested anonymity, said the unit has not been formally placed on the auction block.
But it is becoming widely known in Italy's financial industry that the financially strapped Citicorp, now in a drive to consolidate and raise new capital, would consider offers for the unit if the price were right, the sources said.
In Frankfurt, a spokesman for Deutsche Bank said it has made no formal offer for Citibank Italia. The spokesman declined further comment, noting that the bank frowns on making statements in response to speculation.
Deutsche Bank is already active in Italy, after purchasing BankAmerica Corp.'s Banco d'America e d'Italia network in 1986.
Citibank Italia was formed after Citicorp purchased Banca Centro Sud from the big Italian commercial bank, Banco di Roma, in 1984.
It specializes in consumer banking and financing for small businesses and professionals.
A number of foreign banks - including Chemical Banking Corp., First Chicago Corp., Wells Fargo & Co., and the Hongkong and Shanghai Banking Corp. unit of HSBC Holdings PLC - have pulled out of the Italian banking markets in recent years amid intensifying competitive conditions, according to analysts.
Era of Restructuring
At the same time, the market value of Italian banks has been climbing steeply in recent months, partly due to sweeping restructuring of the banking system initiated by the Italian government, European analysts said.
Under laws introduced last year, both state-owned and privately held banks are given fiscal incentives either to merge or to be acquired, part of a drive to create bigger, more efficient Italian banking groups.
"Given the fact that many potentially attractive Italian banks remain government-owned, a severe shortage of acquisition candidates is apparent and consequently, prices have been driven sky-high," according to Stephen Lewis, banking analyst at Salomon Brothers Inc. in London.