Italian bank UniCredit said on Thursday its smaller peer Capitalia was a possible take-over target but added it could still team up with French heavyweight Societe Generale in a fresh sign it may be readying a new deal.
UniCredit, which vies with Intesa Sanpaolo as Italy's top bank by market value, also posted a 29 percent leap in first-quarter net profit, well ahead of forecasts.
Investors said UniCredit could seek to expand westwards after gaining market leadership in central and eastern Europe through its $21 billion purchase of Germany's HVB in 2005.
"In relation to the recent rumours on potential strategic combinations, UniCredit looks regularly at any option that can create value for its shareholders and also Capitalia may have such characteristics," Unicredit said.
"Currently there are no concrete plans," it added. UniCredit's comments, its strongest on Rome-based Capitalia, came after a market rumour prompted a rally in the smaller bank's shares of up to more than 5 percent on Wednesday. Separately, Capitalia denied any current merger plans but said it had contacted banks over strategic options.
Another market rumour last month prompted UniCredit to state that it had contacted Societe Generale, France's second-largest bank, about "growth opportunities". "If we were and are having contacts with SocGen, that means that on our calculation this can be a value-accretive option," UniCredit Alessandro Profumo told a conference call.
Profumo said he was ready to consider all options that could add value for UniCredit and signalled he preferred friendly rather than hostile deals. But he said he was not yet in a position to put any merger plan to the board or shareholders.
Capitalia, one of the few Italian banks yet to join the country's consolidation wave, is worth about 18 billion euros ($24.37 billion) on the market against UniCredit's 79 billion euros. Societe Generale is worth 70.5 billion euros. Capitalia's Chairman Cesare Geronzi said last month Capitalia was not available for take-over by foreign bank and was not talking to Unicredit.
UniCredit shareholders were meeting on Thursday to approve a capital increase of 1.05 billion new shares or about 10 percent of the bank's capital, to finance possible purchases.
"A merger with UniCredit is the best Capitalia can hope for. They are probably pushing for a tie-up," said Alberto Magnani, head of investment at fund manager Abbacus SIM. "For UniCredit, SocGen makes more strategic sense." In a separate move, UniCredit acquired a toehold in Spain through the purchase of 4 percent stake in Banco Sabadell for 416 million euros. The two banks said they were looking at stepping up cooperation.
Shares in UniCredit were down 1.02 percent at 1500 GMT, after earlier hitting a high of 7.7650 euros while Capitalia was up 0.95 percent. SocGen was down 1.45 percent.