Unicredit, here is who has torpedoed Mustier (not only for Mps)
What will happen to Unicredit after the release of Mustier? The turmoil in the board of directors, the role of Padoan in the MPS dossier, the weight of Micossi in the board, the bipartisan political puffs, the opinion of the analysts. Facts, names, numbers, rumors and comments
The Unicredit stock tumbles on the stock market: at the opening of the week for Unicredit – given the turmoil at the top of the group's governance and the future of the current CEO Jean Pierre Mustier – the share price lost 5%, a decline which also follows the + 42% on the Ftse Mib since the beginning of November.
And in the evening came the note of Mustier: “Over the last few months it has emerged that the strategy of the Plan Team 23 and its founding pillars are no longer in line with the current vision of the Board. As a result, I made the decision to leave the Group at the end of my mandate in April 2021, in order to allow the Board to define the future strategy ”, the head of the company put pen to paper, explaining the dissent in the board on his plan.
But let's go over what happened in Unicredit in the last hours.
THE NEWS OF THE SUN 24 HOURS ON UNICREDIT
As anticipated by ilsole24ore.com over the weekend, yesterday a meeting of the board of directors was held to discuss the renewal of the board of directors of the bank due to expire in the spring: the Unicredit board has the right to present a majority list for the government company of the following three years.
THE TOPICS AT THE CENTER OF THE INFORMAL MEETINGS OF THE BOARD OF UNICREDIT
A meeting of the nomination committee is scheduled for Wednesday. But, according to journalistic rumors, the real crux of the comparison is Mustier's position. There are many issues on the table in this regard: from the verification of the full support of the directors to the strategies of the French manager (the post-sale moves of important assets, the international presence, the creation of a sub-holding for foreign activities, the no to aggregations in Italy, or “no thanks” Mps), to the pressure of the Treasury for Unicredit to digest the Monte dei Paschi, to Mustier's real desire to remain at the helm of the institute.
THE FUTURE OF MUSTIER
"It is not sure that Mustier himself wants to stay another three years at the helm of Unicredit: his international profile (he has long been in Société Générale) could bring him back outside the borders of Italy and according to many periodically the top manager returns to think about it ”, wrote Repubblica today.
DEBATE ON MUSTIER
In fact, the confirmation of Mustier, in office since July 2016, had not been given for certain on the market for weeks, Corriere della Sera stressed: "On the one hand, the banker would be charged with the suboptimal yield of the stock and the lack of a strategy clear after the sale phase (Mediobanca, Fineco, Pioneer, Poland among others). On the other hand, Mustier is maintaining the line of not focusing on mergers and acquisitions. But there is the MPS theme: the Treasury must sell Siena and only Unicredit is realistically able to detect it. Mustier would have asked the government for a dowry similar to that of Intesa Sanpaolo for the Venetian banks (which however had gone bankrupt): about 4 billion between tax credits (called "dta") and a capital increase of Mps covered by the Treasury, as well as the discharge of 10 billion in legal disputes ".
THE NEXT STEPS
But what are the next steps for the next board? The procedure involves four steps, including the appointment of a task force and an external consultant who is Spencer Stuart, called to define the profile of the candidates, to select them and finally to propose a short-list to the nomination committee which, in turn, he submits it to the outgoing board.
THE ROLE OF PADOAN
A process that has already led to the co-optation on the board of directors of Pier Carlo Padoan, a member of the Democratic Party and former Minister of the Economy who among other things followed the MPS dossier (a bank that has always been very close to left-wing parties), already indicated as president-designate, much to the satisfaction of the government.
THE PUFFS OF PARLIAMENT AGAINST MUSTIER
The snorts of the government majority – in truth also of the opposition – are not only journalistic reconstructions but can be traced back to parliamentary acts: just browse through the latest Copasir report – the Parliamentary Committee for the Security of the Republic – which unanimously, therefore also with the yes of Lega, Fratelli d'Italia and Forza Italia, he criticized – with some slips – the moves of the Unicredit summit (to be taken into account that the rapporteurs of the report were MPs and M5s).
THE COPASIR REPORT ON UNICREDIT AND NOT ONLY
At the base of Copasir's critical judgments there is above all the theme of the "sub-holding", that is the project to list the foreign part of Unicredit in Germany. "There have been strong opposition both within the council and in the government, which fears the dismemberment and the passage of the Italian branch to some French group – wrote Corriere della Sera – Mustier would have set it aside for now: a backtrack to which he would have contributed the influence of Padoan ”.
THE ROLE OF MYCOSSES
Padoan's appointment has a precise political significance as well. The former minister, in fact, is called to play an active role in defining the list of candidates for the new board, being part of the Nomination Committee led by Stefano Micossi – one of the most critical Unicredit councilors of Mustier – and in which they sit. also the directors Francesca Tondi and Alexander Wolfgring. The role of director Micossi in the anti Mustier "political" strategy is peculiar: Micossi, historically close to both Carlo De Benedetti and the galaxy of Luigi Abete, as general manager of Assonime (the association that brings together large companies) has just proposed to give more powers in defining the Recovery Plan to the Pd Minister Enzo Amendola (European Affairs), a direction that brings together all the souls of the left.
CASE MPS
On Siena there is the problem of legal risks but also the doubts of the 5 Star Movement on the wedding with Unicredit. The pentastellati do not want photocopy operations like that of Intesa Sanpaolo with Venetian banks, as well as hoping that the Monte will still remain public. Within the year Mef and Monte will have to quantify the capital needs (we are talking about 2-2.5 billion), also in light of the spin-off of 8.1 billion euro of NPLs to Amco.
DOSSIER DTA
This is then inserted into the budget law of a rule that allows Monte, in the event of mergers in 2021, to be able to convert 3.7 billion euros of dta (deferred tax assets) into tax credits, in order to incentivize potential buyers. A possibility on which the M5S is trying to put a stop to precisely the M5S which presented an amendment to the Budget Law to put a ceiling of 500 million on the DTAs and which risks stalling any marriages ( here the in-depth analysis of Start Magazine on Monte dei Paschi di Siena dossier ).
THE RUMORS OF THE SUN 24 HOURS
The arrival of Padoan effectively restarts the totonomine for a possible substitute, according to Il Sole 24 Ore: "Diego De Giorgi, for example, the former head of investment banking at Bank of America led by the same Mustier the board of UniCredit , or Matteo Del Fante, CEO of Poste. There are those who also look to Victor Massiah, former CEO of Ubi historically on good terms with Padoan, or Marco Morelli until a few months ago CEO of Mps and now joined Axa Investments. Among the internal managers, in pole position are Carlo Vivaldi, co-chief operating officer, and Francesco Giordano, co-CEO of commercial banking Western Europe ".
THE AKROS REPORT
According to the analysts of Banca Akros, the eventual exit of Mustier would increase the chances of an acquisition of Mps by Unicredit and reduce the likelihood that it will continue on the path of increasing dividends and buyback operations. The current debate within the board – according to Akros – therefore increases the uncertainty on the bank's strategy and for this reason the recommendation on the share is lowered to "neutral" (from "accumulated"), with an unchanged target of 8.3 euros .
THE ANALYSIS OF EQUITA
"The discussion on governance – adds Equita Sim – is intertwined with the possible evaluation of a deal with Mps, a hypothesis that in our opinion could prove to be neutral in terms of risk and capital for Unicredit only in the event of full recognition of the dta (deferred tax asset) of both banks (about 3.6 billion each) as well as with a capital increase of MPS of 2.5 billion, a scenario that seems difficult to achieve from a political point of view ".
WHAT CREDIT SUISSE WHISPERES
According to Crédit Suisse, the merger with Mps would result for Unicredit in an increase in Rote (return on tangible equity) of 0.6 percentage points and in a 6% increase in tangible book value in the third year, but against a rather high risk of carrying out the transaction. The Swiss bank assumes that the annual cost synergies are equal to 40% of the cost base of Mps, that the integration costs are equal to 1.5 billion euros post-tax and that in the aggregation there is an injection of capital into Mps from the Italian government of 2.4-2.5 billion euros. In terms of capital ratios, Crédit Suisse estimates an impact of 80 basis points on Unicredit's Cet1.
Will Mustier listen to the whispers of Crédit Suisse?
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/unicredit-mustier-mps/ on Mon, 30 Nov 2020 11:07:27 +0000.