PARIS (Reuters) - BNP Paribas is to expand further in Italy by buying full control of CARGEAS from insurer Ageas, as the French bank looks to step up cross-selling of products in Italy, where the business has been impacted by a recession.
BNP Paribas is in the early stages of a plan to boost its profitability, as its retail businesses in Europe struggle from a low interest rate environment.
The French bank’s insurance unit BNP Paribas Cardif has agreed with Ageas to buy out its 50 percent stake in Cargeas Assicurazioni that sells non-life insurance cover to companies and individuals in Italy, the two companies said on Wednesday.
BNP Paribas and Ageas had previously run CARGEAS as a roughly 50/50 joint venture.
“Thanks to the acquisition of Cargeas, we will have a complete insurance offer for our individual clients, with support of our partners UBI Banca and BNL in Italy,” said Virginie Korniloff, a deputy managing director who is responsible for domestic markets at BNP Paribas Cardiff.
BNP Paribas has been developing its business in Italy since its landmark acquisition of retail bank BNL in 2006. BNL has started to refocus its business more on “better corporate and small business segments” to try to lower loan-loss provisions.
Analysts at Jefferies see BNL achieving a 6 percent return on equity by 2020, below the 10 percent target on the group level.
No financial details of the acquisition were disclosed, but CARGEAS’ gross premiums in 2016 stood at 227 million euros and its net income was at 44 million euros.
Reporting by Maya Nikolaeva; Editing by Sudip Kar-Gupta