All ballets (political and financial) on Monte dei Paschi di Siena
What happens in Mps and around Monte dei Paschi di Siena? The article by Emanuela Rossi
After the green light from the European Central Bank for the sale to Amco, the former Sga, of 8.1 billion of impaired loans, what is in the future of Montepaschi? Certainly the exit of the Treasury (68%) from the shareholding – promised in Brussels when it was nationalized – and yet in a hurry as they do not hesitate to make clear from Via XX Settembre. But how? According to the chairman of the commission of inquiry on the banking and financial system, Carla Ruocco (M5S), "a strategic vision and in the national interest of the MPS affair" is needed and for this reason her proposal looks to Spain and the recent M&A operation between the Bankia and CaixaBank banks: create a third-fourth Italian player and transform the rest of Monte into a bad bank, perhaps to be merged with Amco.
A solution that, however, does not seem to be mentioned in the Dpcm at the Palazzo Chigi studio. One thing is certain: if the farewell of the Treasury took place within a few months, the majority shareholder would risk a loss of 7.5 billion euros. Not exactly nonsense.
THE "RUOCCO SOLUTION"
At Sole 24 Ore , in an interview published last Saturday, President Ruocco presented her reflections on how to manage the future of Rocca Salimbeni. “I'm direct. Banca Mps, to date, capitalizes on the stock market about 1.65 billion euros, the market has already substantially 'priced' the bank's derisking and operational risks. If this were the transfer price and, in my opinion, it could not be very different, the State with its 68% stake would collect about 1 billion from the sale of the bank against a total investment of almost 8.5 billion. The return for the state would be equal to -90% of the investment made. Then we should also consider the approximately 5 billion petitum for judicial-extrajudicial disputes against MPS. Of these who would answer? The new buyer? Or maybe we should set up a new indemnity fund? ”.
For Ruocco, therefore, "this is not the time to 'sell off'" on the contrary, it is necessary to aim for a "winning model" which is Spain "with the recent M&A operation between the Iberian banks Bankia and CaixaBank, under the direction of the Sanchez government , to create a large Spanish bank ". On the horizon the M5S deputy sees the strengthening of the national banking system "by stimulating the birth of a third-fourth national bank". In concrete terms, it would be necessary to "sell the branches and branches to one or more national entities, for example to Popolare di Bari to create the southern bank or to other institutions, to create a third-fourth national player and transform the remaining part of Mps into a national bad bank also merging it with Amco. The national bad bank – he continued – is indispensable, as the amount of moratoriums and new loans (totaling about 400 billion) will most likely turn into new NPLs, estimated at about 130 billion ".
WHAT DOES EQUITY THINK
According to Equita, as reported by Milano Finanza , the scheme proposed by Ruocco would be a great help at the exit of Via XX Settembre from Siena but for analysts "it presents obstacles that are difficult to overcome, starting with the transfer of liabilities to the good bad from the bad bank that would open further legal fronts also in light of the recent issues made by the bank ". Alternatively, the State could "take on the legal risks of the bank, a solution that presents direct costs, starting from the extent of the lawsuits, and indirect costs in terms of the very high charges transferred to taxpayers".
THE RECONSTRUCTION OF THE REPUBLIC
Certainly, the Treasury is proceeding with great strides on the path of farewell as reported by La Repubblica . On Monday, the Minister of Economy and Finance, Roberto Gualtieri, signed the Dpcm proposal which is now being examined by the Prime Minister. According to the newspaper directed by Maurizio Molinari, Giuseppe Conte "would have taken a few days to investigate the matter before settling it". The legislative text being drafted, it is recalled, "is one of the preconditions set by the ECB to say yes to the sale of 8.1 billion MPS impaired loans to Amco through a spin-off, with the relative erosion of 1.1 billion of capital for the bank" .
Returning to the Dpcm, art. 2 of the draft states that, after the demerger, "the disposal of the Treasury's stake in Mps (68.5%) is authorized," in one or more phases, through sales methods and techniques in use on the markets, through recourse single or combined with a sale offer addressed to the public of savers in Italy, including employees of the group, and / or to Italian and international institutional investors, to a direct negotiation to be carried out through transparent and non-discriminatory competitive procedures, to one or more extraordinary transactions, including a merger operation ". No mention, Repubblica notes, of the "possible transformation of Mps into a public bad bank, using its banking license, brand and platform to register itself, and then sell with securitisations, the approximately 150 billion euros of new impaired loans that the spring lockdown could cause in Italy". As we said, Ruocco in Sole 24 Ore spoke of the public bad bank.
As for the timing, the decree provides for the sale of the credit institution by May 2022. A date that, however, could be too far away given that the Treasury "has committed itself with the ECB and the EU to give concrete signals on the capital settlement of Monte by December 1st. If there are no direct injections of capital, by the Treasury or by interested investors, MPS will have to publish three letters by that date with which three investment banks say that there is a market to issue At1 capital in bonds for 7-800 million. ". A hypothesis, according to experts, which would be "more impractical than a merger that the Treasury could soon propose to rivals: starting with the Italian Banco Bpm and Unicredit".
THE CONCERNS OF THE TRADE UNIONS
The unions are also worried about the future of Siena, ça va sans dire, according to which "the relaunch of the Bank must take place while safeguarding the entirety of the Mps group, not dividing the current company perimeter". They also "reaffirm the absolute need to protect employment levels". The trade unions of the coordination of Monte dei Paschi di Siena highlight that the debate on the future of the institute "was brought to the attention of political and financial circles by the news of the ECB's authorization for the sale of 8.1 billion Npl in favor of by Amco ". "The bank – they continue – needs a stable corporate structure to better plan its definitive recovery and to exercise its role in supporting the economy for the restart of the country, achievable through a lasting presence of the state participation in the capital".
In the opinion of Montepaschi's trade union coordination, "the path traced by the latest company agreement on the Solidarity Fund, which provides for a large number of hires, is the direction to follow to achieve this objective, which must be achieved through the enhancement of the human assets of Mps and the territorial consolidation of the branch network of the Bank and the Group.
MPS AND COVID EMERGENCY
Meanwhile, yesterday the lending officer of Mps, Fabrizio Leandri, was audited by the parliamentary commission of inquiry on the banking system on the issue of liquidity. Leandri in particular recalled that among the measures adopted to counter the emergency caused by the pandemic, Siena suspended 5.1% of loans to customers, a percentage “higher than the bank's market share of 4.8%”. The support for the economy from Monte, he added, will amount to just under 10 billion. “All the moratoriums that have been requested are active at the moment – he explained -, and we have an active task force of 400 people that is helping our network to ground the formalization. Right now, as of August 31, we have had 62 thousand requests from companies for 11.2 billion, and as I said, they have all been suspended, and we have had 46 thousand requests for 4.5 billion from private individuals. 68% of these requests fall within the scope of the law, and the complement are requests that we have suspended, even if they do not have the requisites required by law; it was a decision of the bank ”.
Data appreciated by President Ruocco who commented closely: "Without prejudice to the positive trend recorded by Banca Monte Paschi di Siena in the implementation of the measures launched by the Government to support liquidity, we will continue to monitor the dossier with great attention Banca Mps hoping that, also in Italy, an operation to strengthen the national banking system can be carried out following the example, under the direction of the Sanchez government, of the recent M&A operation between the Iberian banks Bankia and CaixaBank ”. The five-star parliamentarian noted that during the hearings "the need to create a national 'bad bank' emerges more and more clearly as the amount of moratoriums and new loans, totaling approximately 400 billion, will most likely turn into new Npl, estimated at around 130 billion ". According to Ruocco, "it is necessary to have a strategic vision in this area and to put the right limits to the tsunami that could arrive".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tutti-i-balletti-politici-e-finanziari-per-il-monte-dei-paschi-di-siena/ on Sun, 13 Sep 2020 13:41:41 +0000.