Investment banks active in Italy

Background information

Even if the investment banking industry was first invented in Italy, when Middle Ages commodity traders in Lombardy, followed by Hebrew merchants seeking shelter in Italy from persecutions in Spain began investing into the wheat production and distribution chain,

it appeared in its modern version in the country only in recent times. In fact, Italy split commercial from investment banking in 1936, with the former devoted to short term lending while special, state owned credit institutions were created with the purpose of providing long term credit support to corporations. The separation was maintained after WWII until the Nineties of last century: Mediobanca, mostly devoted to big corporations in the North, and state owned IMI, dealing with the huge concerns of state owned industry, have been the main players of Italy’s CIB industry for decades, along with a handful of smaller operators. Nowadays, three categories of investment banks can be listed in Italy: global, national and niche players. Of course, from Morgan Stanley to Rothschild up to Goldman Sachs, big investment banks did profitable business in Italy, also thanks to the high saving rate the country was used to. Investment banks from abroad are ahead their Italian peers in the loan syndication business, with a market share of 56% as well as in the debt issue with a 62% market share. In recent times things got more complicated, not just because of the global crisis. The case of litigations over derivative contracts sold to hundreds of Italian local governments, the scandal at Monte dei Paschi which saw some big names involved, like Nomura, JP Morgan and Deutsche Bank, made Italy a somewhat mixed place for doing business. Merrill Lynch scaled down its presence, as well as Ubs, Credit Suisse and Royal Bank of Scotland: most of them chose to diversify their business in Italy which resulted in de-potentiating the investment operations. Nomura, which has a long history of doing investment banking in Italy, is believed to be somewhat annoyed with the country, while SocGen, another pillar among foreign players, has no touched so far the investment activity while scaling down other business areas. In addition to Mediobanca and to the big global players there are in Italy some midsized merchant banks, most established in the Sixties of last century. Created in 1961 by initiative of Banco Ambrosiano, Banca d’America e d’Italia and Banca Nazionale dell’Agricoltura, Interbanca grew through the following decades to become a relevant national investment bank focused medium and long term lending to medium-sized firms. In the last 15 years it changed hands several times, from Antonveneta to ABN to Santander, until GE Capital eventually took it over in 2009. Among others, Akros is the investment and private banking arm of Banca Popolare di Milano, while Gruppo UBI has Centrobanca and the insurance group Unipol owns Unipol Merchant. It’s also worth mentioning Banca Leonardo, born in 1999 from the merger of three big Milan stockbrokers and bought by Edoardo Bragiotti, a banker grown up in Mediobanca and Lazard, in 2007.

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