MILAN, Feb 26 Reuters A surge in trading of Banco BPM shares is again drawing attention to Italy39;s thirdlargest bank, which has long been at the centre of speculation about potential consolidation in the sector.

The stock powered to fresh eightyear highs on Monday in Milan, with monthly trading volumes topping 400 million shares for the first time since April 2022, according to LSEG data.

That means more than 26 of the bank39;s share capital has changed hands so far in February, according to Reuters calculations based on market regulator Consob data.

The stock39;s appeal is a combination of the bank39;s possible role in expected consolidation in Italy, as well as good cash dividend returns, investors and analyst said.

Reporting an 85 rise in fullyear profit this month, Banco BPM said it was more than doubling its cash dividend to 56 euro cents a share from 23 euro cents.

It39;s now the highest cashyielding bank in our European coverage, at 18 by yearend and, trading on 5.5 times priceearnings, among the most unloved stocks in Italy, BofA Securities said in a recent note.

We see this as a buying opportunity, it added.

With its roots in Italy39;s wealthiest areas, Banco BPM has been in the past a takeover target for bigger rival UniCredit, whose presence in the rich north is considered too small, especially after peer Intesa Sanpaolo in 2020 strengthened its northern foothold with a takeover.

Following is chart highlighting the spike in Banco BPM39;s traded…