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Banco BPM wants to squeeze more long-term value from retailers' payment business

Banco BPM wants to squeeze more long-term value from retailers' payment business
By Reuters
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MILAN - Italy's third-largest bank Banco BPM is keen to generate greater value longer-term from its retailers' payment business as it explores strategic options for the unit, its chief executive said on Saturday.

Speaking to reporters on the sidelines of the Assiom-Forex conference in Milan, Chief Executive Giuseppe Castagna said Banco BPM was considering ways to boost profitability at its business that provides payment services to shopkeepers.

Most Italian banks have sought a partner for such businesses, known as merchant acquiring, selling their operations in full or in part.

In the latest such deal, Italy's payments champion Nexi last year agreed to buy the shop payments business of BPER Banca and its Banco Di Sardegna unit in a deal worth up to 384 million euros.

Castagna appeared to rule out an outright disposal.

"What we certainly won't do is be selling future P&L (profit and loss) inflows to get cash upfront," Castagna said.

When banks sell fee-yielding businesses, they pocket upfront discounted future revenue flows which the buyer will get back over time from the acquired operations.

"Like with our other businesses, we're looking for ... a model that creates more value for the bank," Castagna said without elaborating.

Banco BPM recently agreed to sell a majority stake in its non-life insurance business to Credit Agricole, its single biggest investor with whom it already partnered in consumer credit.

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