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Here’s how Carige and Popolare Bari make Fitd’s accounts stagger

4 years ago babelfish

Here's how Carige and Popolare Bari make Fitd's accounts stagger

The article by Emanuela Rossi

A consortium that has participated in the two main recent bank bailouts, paying a high price. Maybe too much. The Interbank Deposit Protection Fund (Fitd) was at the forefront, during 2019, to avoid the bankruptcy first of Carige and then of the Popolare di Bari but is aware – and has taken it into account – that those resources are already partially written down. Let's see what is happening.

WHAT THE FITD DOES

The Interbank Deposit Protection Fund ( FITD ) is a private law consortium established in 1987 on a voluntary basis and subsequently becoming mandatory. Its purpose is to guarantee the depositors of the member banks, who provide the financial resources necessary for its activities. Among these there are various forms of intervention towards member banks subject to compulsory administrative liquidation and resolution procedures as well as alternative interventions to overcome the state of failure or risk of failure of the consortium members. The president is Salvatore Maccarone, the general manager Giuseppe Boccuzzi. The directors include the president of ABI, Antonio Patuelli, and the former general manager of UniCredit and current senior advisor of Cerberus Capital and president of Cassa del Trentino, Roberto Nicastro.

THE CONSORTIUM BANKS

  Currently all national credit institutions, with the exception of cooperative credit institutions, and branches of non-EU banks authorized in Italy adhere to the Fund, unless they participate in an equivalent foreign guarantee system. Italian branches of EU banks can also join to supplement the guarantee offered by the guarantee system of the country of origin. In the list, therefore, we find both the major banking groups (Intesa Sanpaolo, Unicredit, Bper, Ubi, Montepaschi) and those of smaller size (for example Artigiancassa, Banca del Monte di Lucca, Banca del Piemonte, Banca di Credito Peloritano) and also Mediobanca . Among the foreign institutions there are Bank of China, Deutsche Bank, the Spanish Santander, JP Morgan – an American multinational based in New York -, the Japanese Mizuho Bank.

THE VOLUNTARY SCHEME

  Provided by the Statute of the Fund, under Title II, there is also the voluntary scheme which intervenes in support of the banks that adhere to it in order to restore them and pursue "the financial stability of the banking sector as a whole". Membership is voluntary and not mandatory as in the Fitd. Among the foreign credit institutions present in the Fund, both Bank of China and Mizuho are missing from the Voluntary Scheme.

THE RELEVANT NUMBERS OF 2019

According to what emerges from the latest financial statements, in 2019 the Interbank Deposit Protection Fund committed 640.9 million to resolve a series of crises, from Banca Carige to Popolare di Bari and for the guarantee in favor of Banca del Fucino. "It was an intense year – said President Maccarone at the time of the presentation of the budget – in which we reactivated the Fund's capacities that had been suppressed by the decision of the EU Commission and we are pleased to have concluded the intervention on Carige, at the end of January and then we started the intervention on the Popolare di Bari ”.

The balance sheet for the year 2019 can count on fixed assets equal to 126,887 euros and on current assets equal to 1,222,711 euros, of which 749,659 euros of cash and 473,052 euros of receivables, mostly towards the voluntary scheme and the solidarity fund . Liabilities items include payables for 1,065,684 euros and a net equity of 376,672 euros given by the 439,917 euros of the Consortium Fund and 63,245 euros from the loss for the year.

At the end of last year the income statement had a value of production, consisting mainly of the contributions of the member banks for operating expenses, of 3,823,747 euros and production costs of 3,820,544 euros. Net of financial charges for 3,203 euros, the result before taxes is equal to zero: once the taxes have been paid, there is a loss for the year of 63,245 euros which is obviously equal to the taxes themselves.

As of December 31st, Fitd's cash and cash equivalents amounted to € 63,423,588. As regards the annual contributions paid by the consortium institutions – for a total of 616,660,022 euros -, only 5,705,462 euros were transferred to the Bank of Italy account to be invested: almost all the resources, 610,954,459 euros, they were used for the interventions carried out in favor of Banca Carige and Popolare di Bari.

In the 2019 financial statements, among the significant events that occurred after the end of the year, it should be noted that in January 2020 the Fund was served three summons before the Court of Genoa by Malacalza Investimenti Srl, Vittorio Malacalza and 42 shareholders, with whom compensation was requested for the damages suffered following the intervention in Carige as part of the recapitalization approved by the shareholders' meeting in September 2019 and amounting to approximately € 498 million. Compensation actions were also initiated against Banca Carige, the voluntary scheme and the Cassa Centrale Banca (CCB). The parties ask for damages for the illegitimate content of the capital increase resolution. "Having regard to the claims of the plaintiffs, on the basis of the opinions expressed by the Fund's lawyers – reads the financial statements -, it is believed that, at present, there are no elements that would lead one to believe that a liability for the FITD is likely to arise depending on the judicial initiatives launched ".

THE WRITINGS IN CARIGE AND POPULAR BARI

Speaking of the current situation of the Deposit Protection Fund, one cannot ignore the problem of write-downs of the most important interventions carried out in 2019, namely those in Carige and Popolare di Bari.

In this regard, as Business Insider recalls, the investment in the Ligurian institute (for about 615 million, in the budgets of the Fitd and the voluntary scheme already at the end of 2019 was worth less than half: just over 266 million. relates to the Interbank Fund, compared to a commitment of 301 million, the write-down exceeded 168 million. In short, the share of Carige held by the Fund (almost 40%) as at 31 December 2019 was worth 132.6 million compared to the initial 301 million The same goes for the voluntary scheme: again at the end of last year the 313 million of its recapitalization tranche was worth 133.6 million.

Going down to the south of the country, here is the other important intervention of the Fitd or the participation in the rescue of Banca Popolare di Bari which in December 2019 was placed under extraordinary administration: the Fund initially paid 310 million, "an anticipatory measure in the framework of a large capital strengthening project of the Banca Popolare di Bari in as of 1.4 billion euros, to be carried out in 2020 – reads the 2019 financial statements -, in which the Fitd has undertaken the commitment to contribute to the Bank's capital increase for a maximum amount of 700 million euros ". The Fund's commitment to the credit institution then rose to 1.2 billion but in the meantime the Fitd began to let it be known that it almost completely lost the resources paid at the end of last year: in the 2019 budget it has already devalued the 310 million for 267.45 million.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-come-carige-e-popolare-bari-fanno-barcollare-i-conti-di-fitd/ on Sun, 20 Sep 2020 14:35:58 +0000.