Crédit Agricole Consumer Finance and Banco BPM strengthen their relationship

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The global partnership between Crédit Agricole Consumer Finance and Banco BPM in the Italian consumer credit market is extended by 15 years.

The global partnership between Crédit Agricole Consumer Finance and Banco BPM on the Italian consumer credit market will not end in 2021. The two groups have decided to extend this cooperation, led by their joint venture Agos, for 15 years. Moreover, the scope of this joint structure will be extended to the entire Banco BPM network (nearly 2,300 branches). This will result in the acquisition by Agos of ProFamily, the subsidiary of the Italian banking group specializing in consumer loans distributed in the Banco BPM network. In the short term, this transaction – valued at € 310 million – will have no impact on the capital structure of Agos, 61% owned by Crédit Agricole Consumer Finance and 39% by Banco BPM. But by 2021, several tracks are on the table. Both shareholders have indeed issued the possibility of an IPO of their joint venture. As part of this possible listing, Banco BPM would have the opportunity to reduce its current stake in Agos, while committing to maintain a minimum stake of 10%. For its part, Crédit Agricole granted Banco BPM a guarantee to buy back a 10% stake in Agos exercisable in June 2021, at an exercise price of € 150 million. Both, however, agree that "the intrinsic value of Agos is well above the level implied by the exercise price of this guarantee. An observation rendering, de facto, the probability of an IPO before this deadline more credible. With nearly € 14 billion in outstanding customer deposits, Agos generated a net profit of € 296 million last year.

Aroun Benhaddou