Mps, here are joys and sorrows for Monte dei Paschi di Siena
All the latest news on Monte dei Paschi di Siena (Mps). The point of Emanuela Rossi
Joys and sorrows for Mps. Here because.
WHAT DO YOU THINK ABOUT THE TREASURE ON MPS
The Treasury wants to leave Siena and to speed up the farewell is preparing to commit itself again after the recapitalization that took place in 2017 and cost a total of 5.4 billion euros. Therefore, to exit 68.2% of Montepaschi's capital by December 2021, as recently reiterated by the Minister of Economy and Finance, Roberto Gualtieri, Via XX Settembre would be ready to commit to the "Hydra M" spin-off operation and thus unlocking the green light from the European Central Bank.
THE MPS PLAN UNVEILED BY RADIOCOR
A step, anticipated by the Radiocor agency , which could facilitate the aggregation with some other credit institution, perhaps Italian, with a view to that risk that has been talked about for some time and that has seen in the acquisition of Ubi Banca by Intesa Sanpaolo an important step.
THE TIMES OF MPS
One thing is certain: the time available is not much given that an extraordinary assembly must be called after the authorization of the ECB. As indicated by Montepaschi in the half-year report, any demerger must be completed within the last two months of 2020.
THE OPERATION PREPARED BY THE TREASURE
In detail, again according to what the press agency reports, via XX Settembre would have undertaken to underwrite 'AT1' bonds issued by Mps thanks to the provisions of article 66 of the August decree which authorizes the Treasury to underwrite "capital increases and capitalization instruments of subsidiaries "up to 1.5 billion for 2020. The bonds could not be offered on the market because they do not pay coupons in the event of the issuer's loss. In the meantime, it should be remembered that Siena – according to what was highlighted in the six-monthly report – foresees a loss both in 2021 and in 2022 in addition to the one already certain of this year. With the Hydra operation, however, Mps' accounts would improve because the institute would become more profitable and more attractive for possible mergers.
Furthermore, for Radiocor , the institute is also planning to issue a T2 subordinate that would follow the one placed last January and which, he recalls, "had an excellent response among investors, allowing the coupon paid by Siena to be reduced to 8%" .
THE ECB GOES AWAY ON AMCO
Last week the ECB gave the conditional green light to the spin-off of 8.1 billion Npl in favor of Amco, the 100% management company of the Treasury, which arrived in the evening to closed markets with a draft decision. But is there really to celebrate the decision of the Frankfurt Institute on Amco? Let's see.
THE SHARE CAPITAL INCREASE
The ECB, in fact, has set some conditions for the ok. The first is that the demerger is accompanied by a capital strengthening, to be implemented with subordinated bonds (technically At1 and Tier2). In practice, particular obligations, which strengthen the core capital. But the Central Bank's Supervisory Authority has not indicated overall figures, except for the 250 million Tier2, to be issued before the demerger is completed. For the second part, it is said that MPS's "overall capital requirements", dictated by the regulators (the Srep ), will have to be "restored". "This second measure (At1) could be around 450 million (therefore 700 overall) but neither the bank nor the ECB have indicated it," said Repubblica .
THE NUMBERS OF RECAPITALIZATION
Corriere della Sera speculated : Mps must “find capital. How many? About 1 billion, according to rumors last night after the note from the bank led by Guido Bastianini who reported on the ECB "draft decision", to which MPS did not reply ".
THE LITTLE REASONING NUMBERS OF THE HALF YEAR
We work hard in Rocca Salimbeni and in Via XX Settembre also because Mps is not in a thriving situation. The bank closed the first half of the year in the red of € 1.09 billion compared to a profit of € 93 million recorded in the same period of 2019. According to the bank in a note following the approval of the accounts by part of the board of directors is the decrease of 45 million euros recorded in the second quarter, weighed down by the devaluation of the DTA (deferred tax assets) for 476 million, by negative non-operating components for 384 million and by adjustments on additional receivables for 107 million .
THE ACCOUNTS OF MPS IN THE FIRST HALF
A negative sign also for revenues, which in the first six months of 2020 fell by 8.4% to more than 1.4 billion with operating costs that exceeded 1 billion (-5.3%), and for the gross operating result which in the second quarter was 186 million due to the decrease in net interest income of 2.2% and commissions of 12.3%. The cost of credit more than doubled to € 519.3 million, which contributed to a net operating result of € 157.7 million. With regard to capital ratios, as at 30 June the Common Equity Tier 1 Ratio dropped to 13.4%, from 14.7% at the end of 2019, and the Total Capital Ratio decreased from 16.7 to 16%.
THE NODE OF LITIGATION
For some time, a noteworthy bugbear has been hovering in Siena, that is, a legal bomb ready to explode and which in the first six months of the year led to allocating resources for € 357 million to the provision for risks and charges. These are provisions, as specified in a note from the group, “mainly attributable to legal risks and risks associated with contractual agreements.
Meanwhile, on July 31 last, "further out-of-court requests for 3.8 billion euros by the MPS Foundation" arrived at the credit institution, bringing the petitum of only "out-of-court requests" to a total of 4.8 billion euros. “With respect to these initiatives – reads the post board release – the bank expresses critical opinions with respect to the arguments made. The arguments supporting this interpretation will be fully developed in the response that will be sent to the FMPS. The Bank reserves the right to take any action to protect its assets ".
As part of the conference call with analysts, Bastianini stated that the total of claims for damages, both in and out of court, against the bank rose to € 10 billion.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-gioie-e-dolori-per-mps/ on Mon, 31 Aug 2020 04:01:06 +0000.