This week, we are proud to publish an in-deep analysis on the Italian Popolari banks situation, one of the most discussed topics since the announcement of the AQR done by the ECB. Thanks to the recent rumors of an Italian decree, which changes the voting powers’ structure of the above mentioned banks, stocks have sky rocketed in few days on an average of +30%. This is because the change in governance will probably boost profitability but, first and foremost, will facilitate M&A transactions.
In order to analyze which are the most probable candidates for banking mergers, we thoroughly studied the differences in market shares of each bank. Then, we proceeded with a deep financial analysis on the loan books and on the capital ratios.
Finally, after making the proper assumptions, we selected the best candidates for an M&A transaction and evaluated possible trading strategies to be implemented.
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