On the 20th of January the Italian Government approved a Decree (so called “Investment Compact”), published in the Official Gazette on 24th January, which will have a material impact on the major Italian mutual banks (the so-called “Banche Popolari”). Indeed this type of banks enjoys a special regulation which aims at ensuring the safe development of the economic entities operating in the local territory where the bank is active, similarly to cooperative banks. For example, the Italian Consolidated Banking Act sets out that each quota-holder of the bank is not be entitled to hold a participation above 1% of the entire corporate capital, save for the statutory discretion to provide for lower thresholds, although not below 0,5% (being therefore the minimum number of quota holder set at two-hundred). Moreover, voting rights shall be limited to one vote for each quota-holder regardless the effective quota held in the bank.

However, under the new Ministerial Decree, within eighteen months from its publication in the Official Gazette, all mutual banks having net assets value exceeding 8 billion Euro shall transform in commercial banks. Considering the current size of the Italian operative mutual banks, this provision will involve the following credit institutions:

  • Unione Banche Popolari
  • Banco Popolare
  • Banca Popolare di Milano
  • Banca Popolare Emilia Romagna
  • Credito Valtellinese
  • Banca Popolare di Sondrio
  • Banca Etruria
  • Banca Popolare di Vicenza
  • Veneto Banca
  • Banca Popolare di Bari

In the intention of the Italian Government such overhaul of the mutual banks’ structure shall allow the Italian banking system to increase its sizes and move toward the practices already existing in the most developed economies of the European Union. At the same time the Government specified that the amendment regards exclusively major mutual banks and that cooperative banks and small sized mutual banks are not subject to the new legal requirements.