Here are the new black holes of Mps. And Pantalone pays
Losses, staff cuts and more. Here is a capital increase and new MPS plans. All the details
Pantalone puts his hand back on his wallet to cover the new losses of Mps. And it will cut another 4 thousand employees. Here are all the details.
HERE ARE THE NEWS OF MPS
The board of Mps, led by Luigi Lovaglio , approved the 2.5 billion capital increase and the new 2022-2026 industrial plan.
WHAT THE NEW MPS PLAN PROVIDES
The project foresees a compound annual growth (CAGR) in revenues of 1.3% in the period 2021-2024 and of 2% between 2021 and 2026 from 2.980 billion in 2021 to 3.286 billion in 2026. The stock opened weak to Piazza Affari at 0.68 euros for 686 million capitalization, while the Ftse Mib sells 0.55%.
WHAT THE ACCOUNTS OF MPS WILL BE
As for net profit, expectations are to go from 310 million in 2021 to 833 million in 2026 with a growth (CAGR) of 48% between 2021 and 2024 and of 21.9% between 2021 and 2026. The cost / income ratio, at 71% in 2021, is expected to drop to 57% in 2026 with a cost of credit that would rise from 31 basis points in 2021 to less than 50 in 2026, while the gross NPE ratio, at 4.9 % in 2021, should drop to 3.9% in 2024. The net NPE ratio, on the other hand, should be 1.9% in 2024 and 1.4% in 2026, to be achieved also through the sale of non-performing loans .
THE STATE OF THE ASSETS
As for capital solidity, the Cet1 1 ratio should reach 14.2% in 2024 and 15.4% in 2026. The plan provides for voluntary exits through the Solidarity Fund which will affect approximately 4,000 people, with cost savings for 270 million on an annual basis starting in 2023, against restructuring costs of 0.8 billion. A reallocation of resources is also envisaged in commercial activities and in customer services.
BRANCH NODE
The current branches of the bank will be reduced by 150 units (of which 100 by 2024) to 1,218, which is 12.3%. At the end of the bank's restructuring, ceo Lovaglio expects to return to the dividend with the 2025 balance sheet, establishing a contained payout ratio of 30% compared to profits.
INVESTMENTS
The plan provides for the relaunch of the commercial platform through 500 million euros of investments and a focus on partnerships in the insurance sector with Axa and on managed savings with Anima Holding and the enhancement of Widiba.
THE ROLE OF THE MEF
Meanwhile, the Mef, which holds 64.23% of the bank, has confirmed its pro-rata participation in the 2.5 billion euro capital increase. The terms and conditions of the transaction (including the subscription price of the shares) will be determined shortly before the start of the transaction, also taking into account “market conditions and feedback from institutional investors”. BofA Securities, Citigroup Global Market, Credit Suisse and Mediobanca will act as Joint Global Coordinators and have signed a pre-underwriting agreement.
STAGES AND MOVES
The latter precedes the call of the meeting of Mps, explains the bank, which will be called to resolve on the increase. The meeting should be convened by the end of September, explains the Tuscan institute, together with the approval of the accounts for 30 June 2022.
THE REPORTS
The plan provides for the advance of voluntary departures with a cost saving of 270 million starting from 2023 (while the previous plan provided for them for 2024) and a simplification of the group structure, the analysts of Equita Sim observe, while " on the revenue front, in continuity with the past, the development of consumer credit and a greater focus on product factories is expected ": a positive element, according to the SIM," is the confirmation of the size of the capital increase equal to 2 , 5 billion, a figure which sets the size of the increase and the market share not attributable to the Mef (therefore equal to approximately 900 million) ". For Equita, the full loaded Cet1 coefficient will be 13.5% at the end of the year, that is almost 500 basis points above the Srep requirements. Banca Akros also highlights the issue of reducing employees, which involves restructuring costs of 800 million, together with the closure of 150 branches and a "prudent" forecast of increase in revenues (+ 2% average per year between 2021 and 2026): these factors should bring the cost / income ratio down to 57% in 2026 from 60% in 2021.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-i-nuovi-buchi-neri-di-mps-e-pantalone-paga/ on Thu, 23 Jun 2022 14:16:02 +0000.