Italian banks are showing renewed interest in crossing the Atlantic bridge to enter the U.S. market.
Cassa di Risparmio delle Province Lombarde, or Cariplo, which has just opened a loan-production office in Chicago, said it is studying the possibility of opening a branch Los Angeles. The state-owned Banca Commerciale Italiana, or BCI, said it is seeking to acquire a U.S. bank.
In 1987, plans to acquire Irving Trust Co. fell through because of an "overwhelming number of federally imposed conditions." Later on, BCI did acquire a bank in Long Island, but it was resold shortly afterward. "The bank was subject to just too many restrictions, explained Mario Arcari, managing director of BCI.
Referring to the merger in progress between Banco di Roma, Banco di Santo Spirito, and Cassa di Risparmio di Roma, Mr. Geronzi said that "the bank that is being born is present in 38 countries and I have no intention of stepping backward."
Appeal of U.S. Strategies
In the United States, however, "it is useless to open more branches," Mr. Geronzi said. "I am looking instead to make alliances with a U.S. bank." The new Banco di Roma group has four branches in the United States in New York, San Francisco, Chicago, and Houston.
San Paolo said that it is imitating the strategy of U.S. banks in Italy that have been curtailing their retail banking operations here and are concentrating on highly specialized and sophisticated financial products.
"For the most part, we are working with multinationals that are opening or expanding in Europe. We are identifying market niches -- like the Ecu and Eurolire markets -- where we find space to operate," explains Alfonso Jozzo, joint chief executive at San Paolo Bank Holding.
Coping with Difficulties
"Considering the U.S. market difficulty, we are doing very well," Mr. Jozzo said. San Paolo's New York branch, with assets of $4.5 billion, reported a 1991 net profit of $14 million. In the first four months of this year, net profit has surgede 35%. The First Los Angeles Bank, acquired by San Paolo in 1982, reported that gross income grew 11% in 1991 to $50 million.
Mr. Jozzo explained the reason for the good performance of San Paolo's U.s. subsidiaries: "There are sectors of U.S. industry that are highly competitive and very solid. And those companies are in the process of internationalizing."
'First Signs' of the Crossing
"The evolution that is taking place in European banking today shares many similarities with that of the U.S. banking industry years ago," remarks Mr. Jozzo.
He concludes that "it will really be interesting to see the two markets merge in 10 ro 15 years, when European banks cross the Atlantic bridge." He said the Deutsche Bank's recent initiatives in the United States "are the first signs."
The Bank of Italy is backing the specialization of Italian banks and promoting the development and diversification of financial markets. "In the years to come, credit institutions must seeknew opportunities," said Carlo Azeglio Ciampi at the central bank's general assembly last month.
Indeed, 1992 is proving to be a year in which Italian banks are taking gigantic steps toward equity financing and in diversifying their operations.
Italian banks have begun to boost their merchant banking activities and portfolio management
They are becoming more dynamic on international capital markets, such as the eurobond market and on swaps and option markets based on lire and the European currency unit, or Ecu.
Italian bank executives say that their department offering leasing and factoring services as well as portfolio management are growing steadily.
While there is yet no equivalent in Italian to allfinanz or bancassurance, Italian banks and insurance companies are linking up daily through joint ventures and commercial agreements, to tap Italy's booming insurance market.
Within weeks, a futures market will begin operating in Italy and legislation introducing pension funds is in the pipelines, opening up two more potentially large markets for Italy's new multiservice banking groups.