Mediobanca sees Bnp Paribas in the future of Unicredit (Padoan coming soon?)
Facts, numbers, rumors and scenarios on the future of Unicredit
Great maneuvers – and perhaps even great talk – in the future of Unicredit, whose title on the stock market today did not shine also for the rumors published by the Sole 24 Ore. While Mediobanca glimpses the bank led by the CEO, Jean Pierre Mustier, in the French group Bnp Paribas and Il Sole 24 Ore launches the hypothesis of former minister Piercarlo Padoan as the future president of Unicredit. Here are all the details.
WHAT THE SUN HAS WRITTEN ON UNICREDIT
As part of the project for the spin-off of Unicredit's foreign activities, announced with the business plan presented in 2019 and which would not yet have the unanimous consent of the board, the banking group is studying the spin-off from the Italian holding listed in Milan of the group's foreign activities and the subsequent listing of the pan-European subholding – through an IPO that could involve up to 49-50% of the capital – on the Frankfurt Stock Exchange. This is what Il Sole 24 Ore reports today, according to which the managing director Jean Pierre Mustier would like to accelerate the project, bringing it to the approval of the Board of Directors by the end of the year. According to sources heard by the financial newspaper, the corporate & investment banking (Cib) division based in Munich would also merge into the subholding.
THE SCENARIO ON ITALIAN HOLDING
With the IPO that would take place through the sale of the shares of foreign activities, the Italian holding would collect resources that would increase its capital ratios. Mustier must convince the part of the board that sees in the split the start of the dismantling of the group, given that a possible German subholding would have its own autonomous Board of Directors and would be supervised by the ECB and Bafin and given that the Italian activities of the current Unicredit Group they would remain outside the perimeter of the pan-European banking hub based in Germany.
MATTER OF BOARD
Given the scope of the project, there are those on the expiring board – underlined Radiocor – would deem it more appropriate to postpone the dossier to the new Board of Directors which will take office in April 2021 (a meeting of the Board is scheduled for today). For the moment, the company has not commented on the rumors.
THE UNICREDIT PLAN
The project linked to the creation of a subholding within Unicredit illustrated in the Business Plan Team23, an unlisted company, where the Italian assets that are subject to the volatility of the spread unlike the German ones, are a subject known to the markets, underlined Mf / Milano Finanza , wishing to reduce the extent of the indiscretions of the journalist of the Sun , Alessandro Graziani: "In the last few hours, according to press reports, the possibility of a spin-off of the activities to which the Cib (Investment Banking) with the listing of up to 50% of the subholding ".
THE MEDIOBANCA REPORT
This last detail made the analysts of Mediobanca Securities think today, who have been analyzing the European banking sector for some time with a view to consolidation after having followed Intesa Sanpaolo's takeover bid on Ubi as advisor, which accelerated times also due to 'Covid effect, he added Mf: "According to the Piazzetta Cuccia specialists, the fact of creating a sub-holding company listed by Unicredit, makes sense especially in the M & a profile".
MUSTIER'S MOVES
Of course, CEO Jean Pierre Mustier has also recently reiterated that he prefers to focus on a possible detachment of the dividend and on the buyback starting from 2021 to favor shareholders rather than extraordinary transactions, but the French top manager has always been consulted as a buyer of assets. For example Banco Bpm or Mps. Only this time Mediobanca does not consider him the hound of the situation, but the prey, summarizes the financial newspaper of the Class group.
WHAT MILANO FINANZA HAS WRITTEN
Therefore, the analysts of the Piazzetta Cuccia institute – which in the meantime participates (with many regards to the Chinese walls?) As an advisor on behalf of other banks such as Mps in credit risk – have hypothesized a series of simulations in Europe to understand where more would be created. value for credit institutions and their shareholders, with the effect that one of the most effective combinations would be between Unicredit (16.6 billion market cap) and Bnp Paribas (41.9 billion capitalization), the latter led by the CEO , Jean-Laurent Bonnafé, who controls Bnl in Italy: “The reality that would arise would have over 68 billion in stock market value and would give life to 1.9 billion synergies by 2022”, added Mf .
FUTURE BNP FOR UNICREDIT?
For Mediobanca Securities analysts, the creation of an MPE type structure (Multiple point of entry model), may not even be necessary in the case of a combination with Bnp Paribas, considered "the least weight of Italy in pro-forma activities ". A bank adopts a multi-point-of-entry resolution if it plans to allow the resolution of different operating branches in different jurisdictions separately under national law, with the calculation of liabilities locally, then state by state.
THE NUMBERS AND THE PERSPECTIVES
The brokers calculated 0.7 billion savings resulting from the overlapping of businesses, a 40% cut in basic costs and a restructuring of Cib, investment banking, which on the one hand would cost 1.1 billion, on the other hand. cleaning operation would then lead to higher revenues of 0.7 billion. Then add 0.7 billion in additional revenues from a reduction in the cost of funding. In this case, because the cost of public debt both in Germany and in France is significantly lower than in Italy.
THE BNP CASE
For Piazzetta Cuccia analysts, Unicredit appears to be the only bank that, aggregated to a French group, would become a “world-class reality, reaching up to 70% of the population in the EU”. In the meantime, visibility on the profits of 2021 remains low, when the weight of NPLs will be felt due to the pandemic. In the meantime, Unicredit will publish the quarterly report as of September 30th on November 5th.
FOR THE SOLE HYPOTHESIS PADOAN IN PLACE OF BISONI IN UNICREDIT
But it is also the leaders of Unicredit who make hypotheses and scenarios flash in the media. The former Minister of Economy, Piercarlo Padoan, is in pole position for the presidency of UniCredit. Ilsole24ore.com writes it. The new top management of UniCredit will be formally elected by the shareholders' meeting next spring. Padoan, explains the website of the Sole 24 Ore , during today's UniCredit board of directors should be co-opted into the bank's board in view of his future appointment as chairman. The formal handover of the baton will then take place with the April assembly, when the term of office of the current president, Cesare Bisoni, ends. The name of Padoan, notes the newspaper, "would thus have surpassed those of other strong candidates for the presidency of Piazza Gae Aulenti".
THE OTHER CANDIDATES
In recent weeks, numerous rumors have circulated about prominent figures both inside the bank (such as Lamberto Andreotti and Stefano Micossi) and outside: from Lucrezia Reichlin, a name given as a favorite by the current CEO Jean Pierre Mustier, to Ignazio Angeloni, Claudio Costamagna, Vittorio Grilli , Domenico Siniscalco and Sergio Balbinot. Padoan, professor of Economics at the La Sapienza University of Rome, has a prestigious international path behind him. After having been Deputy Secretary General of the OECD, since 2009 he has also been appointed Chief Economist, while maintaining his role as Deputy Secretary General. From 2001 to 2005 he was the Italian executive director of the International Monetary Fund. From 1998 to 2001 he was economic advisor to Prime Minister Massimo D'Alema and Giuliano Amato, with positions in international economic policy.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mediobanca-prevede-bnp-paribas-nel-futuro-di-unicredit-padoan-in-arrivo/ on Tue, 13 Oct 2020 14:05:50 +0000.