Mps, because the Treasury will be able to enter Unicredit
Mps: the costs of the public bailout in the Unicredit operation, the goodness of the sale of the Monte according to the Treasury and the scenarios of Minister Franco (including the entry of the State into Unicredit). Facts and numbers after the hearing of the Mef holder on the Mps dossier
"The overall entity of the charges for the State – he added – will be defined at the end of the negotiation and will be evaluated at the same time as the activity of the State in the Unicredit group". As a result – according to the Minister of Economy, Daniele Franco – it is possible that the Mef receives Unicredit shares (we are talking about a stake of around 5%) but without altering the balance of governance.
This is what the Minister of Economy Daniele Franco said yesterday in a hearing before the Finance Committees of the Chamber and Senate, motivating the urgency on the part of the Treasury to reach an agreement with Unicredit on the sale of Monte dei Paschi. While analysts have hypothesized a charge of up to 10 billion for the state coffers for direct and indirect interventions (on NPLs and lawsuits through the Amco asset management company, as well as for social safety nets on redundancies) in the Mps-Unicredit operation.
THE HEARING OF FRANCO ON MPS
"There are no conditions to question the commitment to divest the State's participation in MPS, a necessary initiative that follows on from the commitments undertaken by previous governments" and, in this scenario, the dialogue with Unicredit is the only one that he expressed interest, it is "a necessary initiative", underlined Franco.
THE VERY FRANCO TREASURE ON MPS-UNICREDIT
“This operation constitutes a strategically superior solution from the point of view of the general interest of the country. I would like to reassure that it will not be a state-owned sale "clarified Franco explaining – in response to the concerns raised by political forces and trade unions – that the oldest bank in the world will not be the subject of" dismemberment ", the government will pay" the utmost attention to the protection of workers ", and the commitment to compensate Siena and Tuscany for the loss of a bulwark of their economy will be an" undisputed and incompressible priority "
THE MPS-UNICREDIT AGGREGATION
An aggregation of MPS with a more solid bank, according to the Treasury Minister, cannot be postponed since "if the bank were to remain autonomous, it would be exposed to considerable risks and uncertainties and would have serious problems". For this reason, the Ministry of Economy does not see the conditions for taking time on the disposal of Monte dei Paschi and opening an interview with the European Commission on the stand alone hypothesis.
STRESS TEST
"In light of the outcome of the stress tests that would require a capital increase much higher than that envisaged by the bank, to bring it back to the average values of the assets of the other European banks subject to the EBE exercise – Franco observes – it can be concluded that a capital strengthening plan in which Monte dei Paschi would remain an autonomous subject, the so-called stand alone hypothesis, would be exposed to considerable risks and uncertainties and would have serious competitiveness problems ”.
PLANS
In fact, to bring the institute to average values of European banks – as Franco pointed out – an increase well above the 2.5 billion euros indicated by the stand-alone plan of the CEO Guido Bastianini would be needed. A plan that – this is the criticism of the minister – did not take into account the commitments undertaken by the bank with the EU or a ratio between costs and revenues of 51% by 2021, compared to the 74% envisaged by the bank in its business plan ”.
COSTS
In the probable case that the EU Commission sets a more ambitious cost reduction target – explained the minister – the redundancies could be considerably higher than the approximately 2,500 expected ”. With regard to the negotiation on the table with Unicredit, Franco stated that "at the moment there are no indications that suggest the risk of dismemberment" of Montepaschi with a merger with Unicredit. The operation, which concerns the entire banking business of Monte dei Paschi "will not include – assured Franco – the 4 billion euro of impaired loans and legal risks, and will be conducted in compliance with competition rules".
TAX BONUS
As for the account for the State, the 2.2 billion tax bonus – Franco explained – is an advance on future tax credits while the 1.5 billion increase that the Treasury can inject will be calculated in the valuation of the transferred assets. to Unicredit. Franco, however, reiterated that at the moment Unicredit's proposal remains the proposal of a bidder and it is not taken for granted that the operation will go through. “For Montepaschi – said the minister – we have only one counterpart that has come forward but we will propose a final package only if we are convinced that it will be adequate. If we think it is not, we will not try to close it at all costs. I hope it will close and I strongly hope it will, and I believe there is room for solutions but we will not close at any cost, neither we nor Unicredit ”. The possible merger – assured the minister – will be conducted in a context of "maximum attention to employment issues" and within "a project to relaunch and enhance the city of Siena" while preserving the history, name and Mps logo.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mef-mps-unicredit/ on Thu, 05 Aug 2021 08:23:35 +0000.