March 8 (Reuters) - Italy's third-largest bank Banco BPM said on Wednesday it would apply for a favourable
regulatory treatment of its insurance holdings and expected in
this way to add half a percentage point to its best-quality
capital ratio.
Banco BPM said it had been recognised as a financial
conglomerate by the European Central Bank (ECB), a prerequisite
that will allow it to access a more favourable way of
calculating consolidated capital ratios.
Under European Union banking rules known as 'Danish
compromise', because they were approved in 2012 when Denmark
held the EU presidency, banks are allowed to risk weigh their
insurance investments instead of deducting them from capital.
Banco BPM owns insurance businesses Banco BPM Vita and Banco
BPM Assicurazioni.
The ECB granted Banco BPM the status of financial
conglomerate after the Italian bank gained full control of its
Banco BPM Vita and Banco BPM Assicurazioni insurance
joint-ventures in July 2022, by buying out French partner Covea.
Since then Banco BPM has sold a 65% stake in its non-life
business Banco BPM Assicurazioni to Credit Agricole ,
while retaining full control of the life insurance operations.
(Reporting by Alberto Chiumento; editing by Valentina Za)
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