Profit, causes and credits. All the sbooms of Mps
What emerges from the Mps. Emanuela Rossi's article
Still difficult days for Monte dei Paschi di Siena (Mps) which closes the first half of 2022 with a decrease in profit of 86.5% on the year and with a decline in the main balance sheet items (revenues, commissions and operating result) . Figures that frightened the stock market so much that the stock fell by more than 6%. The bank, as reported by its determined CEO Luigi Lovaglio, however, is moving forward with the application of the industrial plan 2022-2026 and above all on the sale of impaired loans. Above all, it is proceeding swiftly on the road to the 2.5 billion euro capital increase, calling an extraordinary meeting for approval on September 15. Before that date, the green light of the ECB is also expected. On the agenda, the group also informed the grouping of Monte's shares in the ratio of 100 to 1 and a series of amendments to the articles of association.
THE FIRST HALF-YEAR ACCOUNTS OF MPS (PROFIT -86.5% YEAR)
As mentioned, meanwhile, the first six months of the year closed with a net profit of € 27.2 million, of which 18 achieved in the second quarter, down by 86.5% compared to the 202 million of the same. period of 2021. A figure that "is affected by some items recorded in the first half of 2021, including the greater contribution from the sale of securities and that deriving from the valuation of the DTAs, as well as the improvement in coverage of impaired loans which occurred during the first two quarters of 2022 ”reads the note accompanying the accounts. Revenues also decreased (-2.5%), to 1,522 million euros, which however increased by 2.8% net of the lower contribution deriving from the sale of the securities, and commissions (-3.5%) to 728.2 million. A negative sign also for the operating result, against substantially stable costs (-0.4%), which fell by 7.3% to € 453.6 million, but up by 12.6% net of the contribution deriving from the sale of securities . Plus sign for loan adjustments (+ 38.2%) to 224.9 million, due to the increase in provisions also linked to the sale of a package of 917 million euro of impaired loans. The press release also highlights a 1% year-on-year growth in performing loans to customers while at equity level the fully loaded Cet1 stands at 10.8%, 18 basis points more on the year and unchanged in the quarter.
FIRST STEPS OF THE 2022-2026 INDUSTRIAL PLAN
From Siena they also communicate that the implementation of the 2022-2026 industrial plan is proceeding: the trade union agreement was signed for the exit of 3,500 employees, a portfolio of impaired loans for 0.9 billion euros was sold, it was expanded the consortium of banks for the 2.5 billion capital increase and the shareholders' meeting was called to give the go-ahead for the recapitalization.
MORE CLAIMS FOR MPS COMING SOON
News also coming from the compensation front. In the second quarter of the year, MPS recorded an increase – for about 1 billion euros – in out-of-court requests from a consultancy firm on behalf of institutional investors, to which was added in August a further 800 million claim from the same company, namely Martingale Risk. It is a legal and financial consultancy firm specializing in the recovery of losses caused by investments or in the financial sector, founded by the managing director Marco Fabio Delzio, former Bank of Italy. Dalla Rocca specifies that these are "clearly inhomogeneous positions under several profiles, of absolute indeterminacy and generic" and that "the conditions do not exist" for the "damage estimate". However, Monte has "made provisions" and "has mandated its lawyers to evaluate any legal action to protect its rights".
Based on the slides of the presentation to the analysts, Ansa informs, at 30 June the claims for damages against the bank amounted to 2.9 billion euros, of which 1.1 billion of a judicial nature, to which a further out-of-court request of € 0.8 billion in August, for a total of approximately € 3.7 billion. Ad Lovaglio's comment during the conference call with analysts is drastic: the new claims for damages arrived are "letters with requests that in most cases lack documentation, legitimacy and no causal link, essentially unfounded", forwarded "by same consulting company on behalf of some institutional investors. These are serial requests "and" extremely dubious, so dubious as to hardly justify provisions by the bank "and also and therefore" we have given a mandate to lawyers so that they can protect the bank's interests ".
THE ASSIGNMENT OF NON-PERFORMING LOANS CONTINUES
Moving on to another very sensitive issue for Siena, Montepaschi has signed an agreement for the sale of 917.5 million euros of impaired loans, with a 25% reduction in the stock of non-perfoming loans in the portfolio, which allows them to lower their gross incidence on the total loan portfolio (gross NPE) of 100 basis points, at 3.9%.
In addition, a portfolio of unlikely to pay for a total of € 343.6 million was sold to Illimity, a portfolio of unsecured non-performing loans for a total of € 365.9 million and to Amco a portfolio of secured non-performing loans for a total of 208 million. The impact of the transaction is already included in the results as at 30 June. "The perimeter of the operation – informs a note from the credit services company and asset manager – consists of approximately 7 thousand positions, concentrated in Northern and Central Italy, whose value in terms of Gross Book Value (GBV) relates to approximately 80% to businesses and about 20% to individuals. The acquired portfolio is mainly unsecured, loans not backed by real estate guarantees represent over 80% of the total and in 95% of cases refer to corporate customers. The positions will be managed by Intrum Italy as servicer, also including out-of-court management strategies, with a sustainable approach and repayment plans designed specifically to allow companies to optimize cash flows, also considering the current macroeconomic context ". The deconsolidation will take place in the fourth quarter of 2022 and will allow Mps to reach a gross post-sale NPE ratio of 3.9% and a net NPE ratio of 2.2%.
AD LOVAGLIO: WE PROCEED WITH PIANO EXECUTION
At the conference call with analysts, a certain Lovaglio rattled off the first results of his management, 40 days after the presentation of the industrial plan: "We have reached an agreement with the union for 3,500 voluntary exits, we have sold a portfolio of NPLs, we have already obtained The authorization of the DG Comp and we presented the request to the ECB for the meeting in September – said the CEO according to what Ansa reports -. These are all signs that the bank is proceeding not only in commercial activity but is also proceeding at full speed in the execution of the plan and we are convinced that it will be impossible to stop our determination and therefore we will achieve all the objectives we have set ourselves ".
Lovaglio also spoke about the role of Via XX Settembre: "The conditions for the capital increase must be market conditions" therefore "we do not expect the Mef to increase the contribution" compared to its current share in the bank's capital, or the 64.2%. However, “despite the difficult market conditions we are proceeding and do our best to get the capital increase in the best conditions”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/utile-cause-e-crediti-tutti-gli-sboom-di-mps/ on Fri, 05 Aug 2022 10:37:13 +0000.