Shareholders approve merger creating Italian lender Banco-BPM

Shareholders in Italian banks Banco Popolare SC and Banca Popolare di Milano Scarl have approved the country's largest banking tie-up since 2007.

The vote on Saturday opened the path for the pair to create Italy's third-largest bank; one with a market value of about €5.7bn, €171bn of assets, 4m clients and more than 25,000 workers.

Shareholders in Banco Popolare SC were 99% in favour of the deal, while those of Popolare di Milano were a more measured 72% in support, a report said.

The proposed marriage of the co-operative lenders is against a backdrop of Italy's banks being weighed down by about €360bn of non-performing loans.

In addition, there was the matter of Italy's anaemic economic growth, and low interest rates.

The combined bank would be named Banco-BPM.

The deal is the maiden merger sparked by Prime Minister Matteo Renzi's reforms last year to provide lending-sector stability and boost bank profitability.

The new bank expects to cut costs by €320m by 2019, or 10% of the combined total, partly through 1800 voluntary redundancies, Reuters reported.

Popolare di Milano and Banco Popolare also voted to cast off their co-operative status to become joint-stock companies as imposed by the government reform.