MILAN Feb 16 Fiat, which has agreed to
take full control of U.S. unit Chrysler, has asked the Bank of
Italy's permission to turn financing unit Fga Capital into a
bank to cut funding costs, a source with direct knowledge of the
Winning a banking licence would make Fiat more competitive
against rival car makers such as Volkswagen and
Peugeot, which already have their own internal banks
and were able to access cheap loans offered by the European
Central Bank (ECB) during the euro zone crisis, the source said.
"Fiat was not able to access ECB funds during the two Long
Term Refinancing Operations because it did not have a bank," the
source told Reuters on Sunday, confirming a report in Italian
newspaper Il Sole 24 Ore.
The source said the request for a banking licence was
presented to the Bank of Italy earlier this year.
Fga Capital was set up in 2006 as an equal partnership
between Fiat and French bank Credit Agricole, which
also has a large retail banking network in Italy.
Last year, Fiat and Credit Agricole extended their joint
venture to the end of 2021.
Fiat has high funding costs given its 'junk' credit rating
and is looking for solutions to cut costs and thus improve
Fiat declined to comment. The Bank of Italy was not
immediately available for comment.