Is the Amco bomb about to go off?
Amco dossier: facts, numbers and scenarios. The article by Emanuela Rossi
A new chapter could open up in the book that tells the story of Montepaschi, the oldest Italian bank that has been going through a complicated phase for years and from which the Treasury, the majority shareholder, is looking for a way out. Now the stranglehold of Rocca Salimbeni could fall on Amco, the company controlled by the Ministry of Economy and Finance – former Sga – which specializes in the management of impaired loans. In fact, if already from the 2021 budget, published a few weeks ago, there was a loss of 422 million euros due to one-off provisions for 529 million euros on the entire loan portfolio taken over by Mps, the Court also thought about it. dei Conti – in the 2020 financial management report – to highlight the impact of the acquisition of impaired loans from Monte. And there are those who are beginning to ask for more attention to be paid to Amco to thwart possible future problems.
AMCO'S 2021 ACCOUNTS
Returning to the accounts of 2021, it appears that Amco recorded a normalized net profit of 70 million (+ 22% compared to 2020) with Cet1 at 35.1% "in support of the future expansion of the business", as the company highlights. EBITDA of 185 million (+ 17%) and revenues of 307 million (+ 43%). "We close 2021 with significant growth and with significant profitability" commented the CEO of Amco, Marina Natale, who added: "During the year we have successfully supported the restructuring of many Italian companies, confirming the sustainable approach to credit through patient management, aimed at favoring the business continuity of companies, in support of the economic fabric of the country ".
Natale did not, however, mention the fact that – as stated in a footnote of the press release on 2021 results – the 2021 financial year ended with a loss of 422 million euros because the company was forced to make provisions. one-off for 529 million euros on the entire loan portfolio acquired by Mps. In short, the normalized profit of 70 million "does not include the impacts of the process of reviewing the valuation of the MPS portfolio, initiated, as communicated in the half-year report, following the acquisition of the same through a company spin-off in continuity of book values and which has lasted 12 months ".
Therefore, the note continues, “the application of Amco's provisioning policies to the entire MPS portfolio led to one-off provisions of 529 million and an accounting loss of 422 million”.
WHAT THE COURT WRITTEN ABOUT MPS-AMCO
The hearing, it was said, came shortly afterwards from the Court of Auditors which clearly stated in the 2020 financial management report that there is an "objective criticality and risk" profile in the Amco-Mps transaction between related parties for the sale of the compendium of 8.1 billion of impaired loans.
The Court asked Amco to investigate the transaction and found that – since it was a transaction between companies subject to the control of the Mef – the demerger was carried out "in continuity with the book values". And again: “It should 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 profile of objective criticality and risk, the size of which will be fully appreciable in the preparation of the 2021 budget ".
THE INSPECTION WANTED BY THE GIP SALVINI
Other interesting ideas come from outside the national borders. La Verità has in fact disclosed an unpublished report from the European Central Bank which in 2017 contested the lack of provisions in Siena for over 7 billion. The documents, writes the newspaper directed by Maurizio Belpietro, show the results of the inspection carried out from 17 May 2016 to 17 February 2017 and the appraisal of the experts Giangaetano Bellavia and Fulvia Ferradini, appointed by the investigating magistrate Guido Salvini to verify the correct accounting, including 2012 and 2015, of the adjustments in the financial statements on billions of impaired loans and the related provisions.
From the maxi-report, La Verità still informs, it emerges that in those years MPS had not promptly accounted for adjustments to loans in its financial statements for a total of 11.42 billion euros, equal to 7.77 billion net of the tax effect. The report also questions the correctness of the 2016 and 2017 accounts, a fact that – in the event of an imputation – "could lead the EU Commission to interpret as state aid the 5.4 billion that the Treasury, in 2017, paid to Mps as precautionary recapitalization to avoid closure ". In essence, the cards show how in 2015 the difficult-to-collect or already non-performing loans of customers and companies were managed.
THE ECB REPORT
Moving on to specifically talk about the ECB report, La Verità notes that the Frankfurt inspection team examined a sample of 1,534 performing and / or impaired credit positions present in the group's financial statements at 31 December 2015. According to what emerged from the inspection, estimates that additional provisions of 7.55 billion are needed compared to the 22.7 billion existing at the end of 2015. It reads: "The process for identifying credit risk exposures that have suffered a reduction in value is not functioning correctly: consequently, the probability of default is not correctly estimated ".
And again: "The examination of the documentation of the guarantees in the sampled credit documentation revealed a double or multiple count" and "the board of directors is not sufficiently informed of the deterioration in the quality of credit risk". Furthermore, gaps in the data collection and aggregation processes and in the bank's IT systems were highlighted. An entire chapter of the 5,662-page report by the experts Bellavia and Ferradini delivered to the Court of Milan on April 26, 2021, starts from this inspection by the ECB.
Among the positions reviewed by the Eurotower are those of large customers such as Sorgenia, Lucchini and Unicoop Tirreno but also of small businesses as well as of important names such as that of the former president of Confindustria, Vincenzo Boccia.
THE REMUNERATION OF AD CHRISTMAS
In the meantime, the report of the Court of Auditors has revealed another element that gives us thought: in 2020 the salary received by the general manager and CEO of Amco, Marina Natale, jumped by 62.8% compared to 2019 and reached a total of 345,032 euros. Guido Crosetto replied to the tweet of the Startmag director, Michele Arnese, who underlined this fact, highlighting that the amount “would be small, if it made the company work. It would be enormous if the company were instead a very dangerous black hole, like the next great Italian financial scandal ".
AMCO NEW SAIPEM?
A few days earlier, following the disclosure of the 2021 budget, Crosetto himself wrote on Twitter: “In a few months someone will pretend to notice the 'AMCO' problem. And they will all fall from the clouds as for Saipem ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/sta-per-scoppiare-la-bomba-amco/ on Sun, 03 Apr 2022 13:28:10 +0000.