what BPM and Banco Popolare have really suffered is the capital increase by 1 billion Euros imposed Institute of Verona: a request “excessive, but the merger was too important,” he said Pier Francesco Saviotti, CEO of the bank, presenting the market along with the CEO of BPM, Giuseppe Castagna, the merger with BPM approved Wednesday night by the two boards, which will create the third Italian banking group: 2,500 branches, 113 billion of net loans, 120 billion in direct deposits, 8% of the market. A fresh capital required that the stock market has dropped the two institutions: -5.3% to 0.67 euro closing BPM, and -4.8% at 6.93 euro that of Banco Popolare: an expected reaction from manager, because the headlines Wednesday had been suspended for the entire session, which ended in negative.
the ECB conditions
rising i realize only the Verona institute, the weaker of the two – despite the tonnage almost three times higher – for the weight of more than 20 billion of gross impaired loans. The rest of the conditions imposed by the ECB Unica watch led by Danièle Nouy to give the initial go-ahead to the plan – the official one will come after the presentation of the business plan by May – were accepted by the two banks also because the result of a compromise, either well not declared, with Frankfurt: So will the BPM independent spa, not as a new banking license – not granted by the ECB – but using the existing one Popolare di Mantova; The board will have 19 members, and after three years will drop to 15; the seats will be two, one office in Milan, the administrative one in Verona, with centers of Lodi and Novara who will remain with some of general management functions ( “On these there had been a misunderstanding with the ECB, then clarified,” he said Chestnut).
“Tall, beautiful, blond, with blue eyes and rich”
“he has not won and has not lost anyone, we all won. We preferred a positive solution, “said Saviotti,” rather than continue in this position of discrepancies with the ECB that it was only on the strengthening of the capital “, while having the Tour passed stress tests, comprehensive assessment, examination” SREP “and having a legacy far beyond the regulatory minimum of 9.55%. Saviotti over the past two months had definitely denied the possibility of resorting to a capital increase, “I objected to the increase in capital in the belief that, together, the two banks had the ability to manage non-performing loans,” but “the on a position that did not allow alternative we went meet the demands of the regulator. The ECB asked us more because they want the new bank is tall, beautiful, blond, with blue eyes and rich. So we thought it might be a solution not only for the bank but for the country and we have taken the bull by the horns, “but is” a sacrifice but we feel quite unfair. “
the third bank in the country
the operation, explained Castagna, is “the ‘example of a fusion addressed without a bank to prevail over another “and will give rise to” a national leader, the third Italian bank with a better competitive position of competitors in the richest regions: we are the first bank of its kind in Lombardy with a 15% stake, in Veneto and Piedmont the third largest bank; then we share even higher in election provinces, from Milano. ” It will be a bank ‘solid, aggregating and protagonist in the system Country “, with a capital position at the level of the great reference banks like Intesa Sanpaolo and Unicredit. Although for aggregations, said Castagna, there will be time. Bpm-Tour (the name does not yet exist) will be ‘a reference point for others who may think to join but it is not our intention to look to other combinations. “
The management of non-performing loans
The equity level (CET1) will come to 13.6%, because all the increase of the Bank capital – already pregarantito by Mediobanca and Merrill Lynch, and that goes through even if the merger were to be no more – “it will be allocated to the increase in loan coverage levels doubts”: that of all impaired will rise to 48.5%, that of doubtful loans to 62.1% from sale of loans and strengthening the shell. The budget will cover 10 billion of gross loans, as well as to bring the level of npl from 24% to 19% of loans in the banking system average. “We do not want to sell off the npl, but sell them if there is an opportunity. Meanwhile, we cover them most, “stressed Saviotti. Which added a personal note: this operation “I close my professional career with a positive result, only one.” Saviotti, 75, will remain in the bank with the role of chairman of the executive committee, with Castagna CEO and the current number one in Verona, Carlo Fratta Pasini, as president. Veronese origin also the general manager, Maurizio Faroni.
layoffs Nothing
Rising capital shall be effected with a mix of measures, to be defined as the subscription of new shares with pre-emption rights, reserved for investors, accelerated bookbuilding, or convertible bonds being converted, having ‘attention to our current shareholders, “continued Saviotti. Including recapitalization, increased coverage, product factories (including AlettiGestielle, Soul, Akros, Agos, the bancassurance, the YouBanking Webank and online banking) and cost savings (with total gross synergies of 365 million) c ‘ is space, as planned, for an increase in value of 1.9 billion which would bring the capitalization of the new bank to 6.5 billion euro, well below Intesa Sanpaolo and Unicredit but well above the current third-largest banking group , Ubi, which is 3.5 billion euro. A push will come from cost cutting but will not include layoffs: “There will be problems for employees, there will not be any redundancies,” said Saviotti, “who will be released will do it because it will participate in the solidarity funds.” Saviotti made it clear that in six years the Tour has been reduced staff “more than 4 thousand units, using of course the solidarity funds”, ie the tools provided Abi.
Guzzetti and “bureaucratic whims” of Europe
Appreciations for the operation came from the President of Fondazione Cariplo, Giuseppe Guzzetti,” Whatsoever you do to put together two banks that have the same culture and the same territory is positive. The administrators of the two banks have had the courage to tackle a difficult issue, they are to be admired. Then we must acknowledge that the Minister Padoan, the Prime Minister and the Governor of the Bank of Italy in this initiative have spent positively; finally those who are in Frankfurt and Brussels have had to acknowledge that it could not block everything to bureaucratic whims. These banks are healthy, I also say whether it will become a competitor Intesa “.
March 24, 2016 (edited March 24, 2016 | 18:03)
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