By Elena Vardon

France's Credit Agricole has further lifted its shareholding in Banco BPM, Italy's third-largest bank by assets.

Credit Agricole added a 0.3% stake through derivatives tied to shares, taking its position to 20.1%, according to a regulatory filing published on Monday. It will be able to convert the derivative contract into physical shares once the European Central Bank approves its request to cross the 20% ownership threshold.

BPM became the target of an unsolicited bid by larger peer UniCredit late last year, which valued it at more than $10 billion at the time. UniCredit last month dropped the bid after a drawn-out battle during which the Italian government stepped in to impose conditions on the deal that the suitor argued made the transaction unfeasible.

The French lender, which was already BPM's top shareholder, in December bought financial contracts to double its position to 19.8% as it sought to defend its commercial interests and strengthen its negotiating position as UniCredit circled. Credit Agricole has key consumer finance and insurance partnerships with BPM in Italy, its second largest market.

"The aim of this participation at this stage is to continue to defend our interests in Italy and to maintain these partnerships," Chief Executive Olivier Gavalda said in an earnings call with journalists last week. The purpose of increasing the stake to just over 20% is to consolidate BPM's contribution into the bank's results and avoid quarterly fluctuations in their accounts, he added.

Credit Agricole has said it has no plans to seek full control of BPM and intends keep its shareholding just under 25%, the level at which a mandatory takeover offer would be triggered.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

August 05, 2025 04:32 ET (08:32 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.