Not just Mps, here are Amco’s bills and flaws
Business, holes and accounts of Amco, the Treasury company for non-performing loans. The article by Emanuela Rossi
Amco's 2020 management was marked by the acquisition of Montepaschi's impaired loans. The statement comes from the Court of Auditors who wrote the 2020 financial management report of Asset Management Company spa (AMCO), the former Sga founded in 1997 as a bad bank of Banco di Napoli, approved with resolution no. 27/2022 by the control section of the accounting judiciary.
In the document, the Court highlights how the transaction was carried out in the form of a partial, non-proportional, asymmetrical spin-off of a branch of the bank.
AMCO'S 2020 RESULTS
Overall, reports the accounting judiciary, the results and figures for the 2020 financial statements are positive despite the effects of the pandemic on Amco's financial and management activities. The financial statements show a positive economic result (74,800,684 euros), an increase compared to 2019. Among the active components, there was an increase in net commissions (+ 4.9%) and in the intermediation margin (+59.8 %).
On the other hand, as regards the balance sheet data, the overall increase in assets is approximately € 6.8 billion. A plus sign, compared to the previous year, also for the assets of the consolidated financial statements (6,900,372,000 euros), slightly higher than the individual one, with a difference mainly due to the incidence of financial assets valued at amortized cost and higher by approximately 100 thousand euros. The shareholders' equity of the consolidated financial statements – the Court points out – is better than the individual one, due to the increase in profit, the share premium and the Monte dei Paschi di Siena operation. Among the most significant liabilities, there are those due to outstanding securities (approximately € 2.9 million) with an incidence of senior securitization notes issued by the subsidiary Fucino NPL's srl and senior unsecured bonds, issued by the parent company in 2019 and 2020.
Finally, with regard to the management and recovery of receivables transferred to the Intended Assets of the former Venetian banks, in 2020 Amco retroceded cash flows for a total of 550 million, down compared to what was recorded in 2019.
THE ANALYSIS
Carlotta Scozzari, journalist expert in economics and finance of the Gedi group wrote a few days ago: "Some reflections on Amco (100% Treasury), which in 2021 lost 422 million after write-downs of 529 million on the #Mps credit portfolio (65% Treasury ). In autumn 2020, the former Sga had purchased bad debts and unlikely to pay from Monte with a gross value of over 8 billion, already written down to 4.1. Reasons for the 2021 devaluation? Covid? Or did Amco not manage credit well? Or had he paid too high a price? Ex ad Ifis Colombini, in November 2020, he had said that "Amco falsifies the npl market" by buying at too high prices. If that were the case, it would mean that a Treasury company has actually provided a "helping hand" to another Treasury-controlled, publicly traded banking company. And that, as a consequence, the unlisted company has lost over 400 million ”.
MPS DOSSIER FOR AMCO
To return to the report of the accounting judiciary, the Court chaired by Guido Carlino states that "the portfolio of impaired loans of Monte dei Paschi di Siena acquired by Amco spa in 2020 is significant: the acquisition and its completion have distinguished, for the year under review, the operational management of the financial intermediation company, wholly owned by the Mef and active on the impaired loan market ". It should be remembered that Amco, which in 2017 was involved in the management of the financial crisis of the former Venetian banks (Veneto Banca, Banca Popolare di Vicenza) as the transferee of two compendia of impaired loans of the same, subsequently developed the activity of acquisition of NPE (non-performing exposures) portfolios.
We remind you that in November 2020 the partial non-proportional demerger deed with asymmetric option of Mps in favor of Amco was signed. The demerger – as a press release of the time informs – was to be implemented, by virtue of the exchange ratio, by attributing to the Siena shareholders over 55 million newly issued category B shares of Amco and at the same time the cancellation of almost 138 million MPS ordinary shares held by the bank's shareholders. Following the issue of the B shares of Amco, the share capital of the latter was equal to more than 655 million euros, of which 600 million ordinary shares, and were assigned to the shareholders of Montepaschi while the corresponding shares of the credit institution were canceled by the shareholders in a non-proportional measure.
In fact, it should be remembered that about 90% of the MPS shares to be canceled were held by the Ministry of Economy and Finance, the majority shareholder of Rocca Salimbeni, and about 10% by the other shareholders.
THE MPS GRAINS FOR AMCO
There is a profile of "objectively criticized 'and risk" in the Amco-Mps related party transaction for the sale of the compendium of 8.1 billion of impaired loans carried out at the end of 2020. The Court of Auditors writes in the report on his control over the financial management of Amco, the public company led by Marina Natale. The Court of Auditors arrives with its times to analyze the 2020 budget (Amco in the approval of the 2021 accounts has already carried out a one-off coverage of over 528 million on the portfolio purchased from Monte dei Paschi). The accounting magistrates asked Amco for an in-depth analysis of the transaction, finding that – since it is a transaction between companies subject to control by the same body, the Mef – the demerger was carried out 'in continuity' of the book values', assuming the book values to which the assets and liabilities were recorded in the balance sheet of the spun-off bank, at the effective date of the same ". The Court therefore adds: “It must be noted on this point how the size of the portfolio is likely to generate, as a result of the aforementioned valuation process, significant accounting differences in the form of adjustments / write-backs. This is a criticized objective and risk profile, the size of which will be fully appreciable in the preparation of the 2021 budget ".
POPULAR CHAPTER OF BARI FOR AMCO
Also in 2020, another operation to rescue a bank in distress for years (and in extraordinary administration). In June, Amco signed a transfer agreement with Popolare di Bari for a portfolio of impaired loans with a gross book value of approximately 2 billion, made up of approximately 60% of positions classified as unlikely to pay (UTP ) and for the remainder from bad debts. The total price of the operation, as evidenced by a note from Amco itself, was approximately 500 million. The effectiveness of the sale was conditional on the payment of the capital increase of Popolare di Bari, approved by the assembly of June 2020.
CREVAL AND AMCO
Here we are with two banks, certainly not in the conditions of the previous ones, namely Creval and Banco Bpm. In August 2020, Amco purchased from Credito Valtellinese a portfolio of impaired loans with a gross book value of approximately 270 million euros, mainly towards corporate customers, consisting of approximately 60% of positions classified as non-performing and approximately 40% as Utp. In the note accompanying the transaction, Amco confirmed its goal of sustainable growth “leveraging economies of scale, within a highly competitive market”. Moreover, in the previous month of March, the company had already carried out a sale transaction with Creval for the purchase of approximately 177 million secured non-performing loans.
BANCO BPM
In November, however, Amco issued a binding offer in favor of Banco Bpm for the purchase of a portfolio of impaired loans owned by the bank with a gross book value of over 600 million, especially towards corporate customers classified as Utp. The operation – reads the note – was conducted through a competitive procedure following which two operators – one of which Amco – bought two different portfolios, both of which were the subject of the procedure.
CARIGE
Returning to credit institutions in difficulty but moving to 2021, last December Amco and Banca Carige completed the transfer of a new portfolio of impaired loans deriving from leasing contracts. The sale, which had legal effect from December 17, 2021 and economic effect from July 1, 2021, concerns a portfolio with a total gross value of approximately 17.7 million and made up of non-performing loans and UTPs deriving from leasing contracts without underlying or with underlying of a real estate or instrumental nature. In March of the same year, Amco had already carried out a sale transaction with the Ligurian bank – of which Bper will acquire 80% in the hands of the Interbank Deposit Protection Fund – for the purchase of approximately 70 million bad loans and Utp. The December 2021 transaction represented Amco's third lease loan acquisition completed in the year.
THE EMOLUMENTS OF MARINA NATALE
Finally, the report on Amco highlights how in 2020 the company assumed the status of issuing company (it then issued bonds) and therefore was exempted from complying with the regulation on the remuneration of directors of companies controlled by the Treasury (law 22 December 2011). The consequence is that the remuneration received by the general manager and chief executive officer Marina Natale jumped by 62.8% compared to 2019 to an amount of 345,032 euros. In addition to the RAL of 400 thousand euros per year (approved starting from May 2020), writes the Court of Auditors, the top manager Amco is entitled to a variable of 200 thousand euros linked to the achievement of certain objectives (so-called target bonus mbo).
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/non-solo-mps-ecco-conti-e-magagne-di-amco/ on Tue, 29 Mar 2022 09:52:26 +0000.