What Mps risks with lawsuits

16 August 20213 years ago babelfish

Mps seems to have completely underestimated the risks of disputes which, between lawsuits of individual shareholders and out-of-court risks, amounted to 5.1 billion. The in-depth analysis by Fabio Pavesi for il Fatto Quotidiano

Not even the time to celebrate the half-year, with profits of 200 million (children, however, of the financial management, more than the ordinary one still firm and also by virtue of lower adjustments on sick loans) and for Mps a new front of inquiry is opened by the Milan Public Prosecutor's Office, as revealed by Repubblica . This time it concerns the policy of provisions for legal risks, considered to be underestimated, by a series of complaints submitted by Giuseppe Bivona, who has been filing lawsuits against the bank for years. The complaints concern the half-yearly financial statements of 2020 and the nine months of the same year.

But how justified, and above all what could it be, the new judicial grain that falls on the disastrous Sienese bank ? Leafing through the accounting documents of Mps it turns out that, still at the end of 2019, the bank actually seems to have completely underestimated the risks of disputes that between lawsuits of individual shareholders and out-of-court risks amounted to 5.1 billion, to which it was added , in mid-2020, the MPS Foundation's maxi-cause worth 3.8 billion. Now the maxi-damage of the Foundation has completely recovered, after the settlement agreement for only 150 million, signed in recent days by the bank with the former majority shareholder of the dark years of Mps.

Well, out of the 5.1 billion petitums that still remain, the bank had only set aside 156 million at the end of 2019. Really little thing. It is from here that the exposures of Bivona evidently started. Mps must therefore have run for cover, raising the provisions in the second half of 2020, thus bringing them to 984 million at the end of December last year. A powerful run-up, a sign that the underestimation of risks was probably real.

The question today is: but is that nearly one billion dollars set aside in the budget adequate? It does not seem. If it is true that the field has been cleared of the 3.8 billion of the Foundation, there are still 5.1 billion pending cases. Of which the same bank, in the 2020 budget, reports that 2.5 billion have a risk defined as "probable" of losing, while 600 million are classified as a "possible" risk. It is therefore 2.5 billion plus 600 million which Mps may have to take on in the future.

Among these there is also the request for damages for 500 million euros by the former partner Francesco Gaetano Caltagirone, as reported by La Stampa. The request, dating back to 2014, would have been renewed in 2018, and returned to the top of the research that the group is carrying out to reduce the impact of legal risks on the financial statements and to present itself "clean" to the negotiations with Unicredit .

A total of over 3 billion in extraordinary charges, a ballast that would further send the bank, already suffering capital, on which the protection belt allocated so far covers just under a billion. Little has changed in the 2021 quarterly report. It will be necessary to see if the half-year financial report, not yet available, will raise its guard by increasing the provisions. Apart from the investigation by the Public Prosecutor's Office, today there is a gap of 1.5 billion in the accounts of MPS, on the 2.5 billion of probable damages. A dark area of uncertainty that certainly does not make easy the due diligence that the men of UniCredit have recently begun to carry out on the numbers of the Sienese bank. A new stumbling block, yet another, beyond the legal matter, on the troubled budgets of MPS.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mps-cause-legali-cosa-rischia/ on Mon, 16 Aug 2021 05:30:13 +0000.