Intesa Sanpaolo stock price gains 14% on the week as ECB approves UBI takeover

Intesa Sanpaolo stock price gains 14% on the week as ECB approves UBI takeover
Written by:
Michael Harris
5th June, 21:09
Updated: 5th June, 21:10
  • ECB approved the planned €4.9 billion takeover of UBI Banca by the Italian banking giant Intesa Sanpaolo
  • Intesa now likely to become the Eurozone’s seventh-largest bank with more than €1 trillion in assets
  • Shares of Intesa gained more than 14% this week, recording the best week since 2011
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Shares of Intesa Sanpaolo (MIL: ISP) recorded the best week since 2011 by gaining more than 14%. The price action is now approaching a critical resistance around 1.80, which served as a multi-year support in the past. 

Fundamental analysis: ECB approves UBI takeover

Intesa Sanpaolo received positive news from the European Central Bank (ECB) in relation to its takeover of UBI Banca (MIL: UBI), Reuters reports. The bank now has to get approval from Italian antitrust and market authorities.

By completing this deal, Intesa hopes to become the Eurozone’s seventh-largest bank with more than €1 trillion in assets, focused on asset management and insurance. Going forward, Intesa will launch an official bid now and wait for a green light from the Italian Competition Authority (ICA), which is expected to rule on the case over the course of the next month. 

“UBI Banca has local entrenchment in the most dynamic regions of the country, enjoys outstanding results that have been achieved thanks to the excellent job of both its CEO and its management team, and has a sound Business Plan. All this can continue to be achieved and be indeed further enhanced in the combined Group,” the bank said in February. 

Intesa launched a €4.9 billion bid to buy UBI Banca just a few weeks before the COVID-19 outbreak caused havoc in northern Italy.  

“The combined Group’s profitability will benefit from expected run-rate pre-tax synergies of €730 million per year, €680 million by 2023 and a further €50 million by 2024, of which €510 million from costs (equal to around 5% of the combined Group’s 2019 pro-forma costs) and, taking revenue attrition into account, €220 million from revenues (equal to around 1% of the combined Group’s 2019 pro-forma revenues),” Intesa further said. 

Italian authorities urged domestic banks to consider mergers as to lower the costs and increase profits.

Invezz reported last week that Intesa has given preliminary approval to a 3-year government loan worth more than €6 billion euros for Fiat Chrysler Automobiles (BIT: FCA).

Technical analysis: Best week since 2011

Shares of Intesa Sanpaolo gained north of 14% this week to record the best week in 9 years. This way, the buyers made sure that they continued in June where they left in May, having gained more than 11% in the last two weeks of the month.

Intesa stock weekly chart (TradingView)

Intesa stock price is now approaching the critical short-term resistance around 1.80, which used to act as multi-year support prior to the coronavirus-related market selloff. To learn more about how support becomes resistance, and vice versa, read here

Summary

Shares of Intesa recorded a great week again to make it three in a row. The banking giant received a green light from the ECB for a planned takeover of UBI Banca, subject to approval from the Italian Competition Authority (ICA).

Invezz uses cookies to provide you with a great user experience. By using Invezz, you accept our privacy policy.