Bpm-Tour, examination Bankitalia then merging back under the lens ECB – BBC

Verify in the Bank of Italy for the state of negotiations between the Popolare di Milano and Banco Popolare, for weeks grappling with the talks to launch the first of mergers sought by the decree of Renzi on Popular a year ago. Administrators

Giuseppe Chestnut, CEO of BPM (Imagoeconomica)

delegates of the two popular institutions, Giuseppe Castagna for BPM and Pier Francesco Saviotti for the Tour, Wednesday, February 24 will bring to the attention of the National Street wedding plan updated after the stakes set in the recent visit to the European central Bank. The two bankers have been summoned to the Palazzo Koch for the late morning, probably also to prepare for the meeting to be held in the coming days in Frankfurt with the Supervisory men led by Danièle Nouy.

How to dispose of the sufferings

The main problem to solve is that of the management and

Pier Francesco Saviotti, CEO of Banco Popolare (Imagoeconomica)

the disposal of non-performing loans of the group. Banco Popolare is bringing to the merger some 14 billion of non-performing loans (npl) compared with a net tangible equity of approximately 6.5 billion, while BPM has 3.6 billion net impaired compared with 4.5 billion tangible net worth. Both have a higher capital ratio to the minimum set by the ECB with the Srep examination, then they would have no immediate need to strengthen the equity. However the discussion that has been ongoing for weeks is precisely at the level of reduction in the stock of non-performing loans.

BPM (whose advisor Lazard and Citi) and Banco Popolare (with Merrill Lynch consultants, Mediobanca and Colombo & amp; associates) have proposed a multi-annual plan for the disposal of non-performing loans through the cash flow produced each year by the new superbanca with their results. This process would avoid the increase of capital that would be necessary if the ECB asked to reduce in a short time part of the stock of non-performing loans: if not, it speaks of a need for additional capital (to be purchased on the market or otherwise) estimated between 1 and 2 billion euro. But both Castagna is Saviotti have always denied the need for recapitalization, which would undermine the whole operation.

The focus of the Bank of Italy

the focus is high by all the protagonists of the story, beginning with the European central Bank, which is facing the first bank merger in the Eurozone after the birth of the Single Supervisory below the ECB. For this reason, the merger plans are studied with particular attention. Italian banks also (but not only) looking with interest criteria and the Frankfurt analysis mode because it will be a benchmark for other future transactions that may be attempted. In this scenario, the Bank of Italy can play a proactive role in the talks with the Frankfurt authorities. Already in recent days representatives of Bank of Italy had flown to Frankfurt during the first summit of bankers with the Supervisory Unica.

The BPM spa node and double assembly

the merger plan also provides for the maintenance of the commercial network of independent BPM Spa for three years. A theme dear to the union of souls and Piazza Meda shareholders-employees, so much so that some have already indicated that the proposed merger would be hampered if this condition is not accepted by the ECB. Another central theme of this game will be how to proceed with the approval of the wedding in the church. It does not in fact mean that the aggregation can be brought to a vote of the shareholders after the transformation in spa of the two banks. Tuesday meanwhile, the BPM management board approved the budget in 2015, confirming the findings on February 8th. With regard to capital requirements, Piazza Meda has also confirmed that the common equity tier 1 ratio (CET1) equals 11.53% including the net income not distributed.

February 23, 2016 (edited February 23, 2016 | 21:41)

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