Ko banks, does not convince Atlas – Milano Finanza

Unexpected and dramatic turnabout of banks on the Milan Stock spite of the imminent launch of the Atlas fund. The Ftse Mib index accelerated downward and now loses 2.06% to 17,357 points with the two big, Intesa Sanpaolo and Unicredit , briefly suspended for excessive downward, that fall of 5.66% and 5.22%, respectively. While among the banks the store got excited more about Bper (-3.82%) and Ubi Banca (-3.98%).

The fund is the Atlas system to shield the capital increases and the purchase of non-performing loans, which will have a budget of up to EUR 6 billion and a term of five years, with a possible renewal for other three. In particular by Intesa Sanpaolo and Unicredit will come a contribution of € 1 billion each, by other banks from 500 million to 700 million euro and approximately 520 million from foundations. The CDP will contribute with 500 million, while other 500 million-700 million will come from insurance companies. “Intesa Sanpaolo and Unicredit suffer because they will be called to make a hefty contribution to the fund,” says one expert, who points out that “some players imagined a minor contribution.” A trader agrees: “The decline of the two big crushes all securities of the fund.”

The fund should allocate 70% of its resources to the capital increases and could detect the control of a bank through the dell’inoptato subscription. Up to EUR 2 billion could be invested with dell’inoptato signing of the next capital increase of Banca Popolare Vicenza and Veneto Banca. The remaining 30% is for the purchase of non-performing loans with the possibility of using the only leverage in this case and in quantities not exceeding 1.5 times the equity value.

Subject to authorization by the ECB, by next April 29, Atlas will carry out the first operation on a target bank, Popolare di Vicenza, whose capital increase will start by return with a guarantee of subscription of any unsubscribed shares (up to 1.5 billion) by the Unicredit . And ‘what explains a preliminary draft that Il Messaggero published exclusively.

The investment portfolio of the vehicle in the process of development, according to the findings of the document explicitly refers to the capital increases at the gates Veneto Banca and BPVicenza, but also speaks of “other Italian banks that may be necessary recapitalization required by

as for the strategies adopted by the fund, the entrance in target banks can only succeed in the face of “a steep discount valuations on equity” and “with long-term perspective.” There is also talk of “significant potential for value creation through sales operations or merger with other Italian banks results from the achievement of synergies.”

According to the drafters, the strategy adopted by the vehicle would “benefit from prospects value creation arising from a side by the potential appreciation of share prices of target banks – especially in light of the expected consolidation phase in the industry and the enhancement of the resulting synergies – and on the other by the expected returns on investment in notes and other instruments financial. “

In the absence of the intervention of the Fund, the Italian banking system may cause” severe repercussions “among which are cited” possible further pressure on share prices and banks’ market capitalization, worsening funding conditions and restrictions on refinancing of certain deadlines and negative impacts on the value of the portfolio securities of Italian banks. “

” the document that is running on the details of the fund Atlas contains some unclear aspects such as the concentration the single investment and the level of leverage that can ‘have the vehicle. Then there are the timing a little ‘pull: it is expected to start the first operation on 28-29 April. It also seems to be some pole to make effective plan to restrict the freedom ‘of action. The project thus seems a bit ‘more’ complicated than what you thought. In my opinion you are still experiencing a sell on excessive news on the industry. The market after the government project document, with some still uncertainty on the table, sells the field and take home the profits of the last two sessions of rally, “said a trader at MF-Dow Jones

The solution of the credit node suffering of Italian banks will help “certainly” the growth prospects of the country, which in recent forecasts made by the international Monetary Fund turned out to be weaker than expected. Compared to the January forecast the expected IMF relating to the product domestic gross national passing from 1.3% to 1% on 2016, and from 1.2% to 1.1% on 2017 data to compare to those of Def 1.2% this year and 1 , 4% for the next.

An increase of two decimal places on 2016 which become three on the 2017 course has negative repercussions on the Italian public finances. the expectation of the IMF on the deficit / GDP is an element for this’ year to 2.7% compared with 2.3% of the government, after the 2.6% at which it is stored 2015. More significant still the prospect of a debt / GDP ratio would continue to rise instead of fall: compared to 132.6% last year, the fund is betting on it 133% this year against 132.4% of the new official target.

Maurice Obstfeld, head of Washington research institution, has explained why in the World Economic Outlook Italian growth is defined weaker than expected. “The whole of Europe is struggling with lower growth prospects. Italy, in particular, is struggling with problems related to the suffering of the banking system,” said Obstfeld.

When these problems will be solved, and the government is working on this front, “although the details are not clear,” he noted, the outlook for Italy improve. “If we succeed with this success will certainly help the growth prospects in general,” said the chief economist of the IMF.