“An immediate and permanent solution to the problem of the NPL, a capital plan that includes a capital increase of up to 5 billion already provided by a maxi-pool of international banks, increased coverage substandard loans to 40%. We are the real final breakthrough that will bring MPS to be among the strongest banks in Italy. This time the Italian system has teamed up and worked in the interest of all. An alliance with another bank? It is no longer a necessity, but a future option. ” The day after the approval of the maxi-group Monte Paschi recovery plan, approved at the last minute and before the negative outcome of the stress tests, the managing director of MPS Fabrizio Viola told Il Sole 24 Ore the last busy day and future perspective. Tracing also the years of detachment from the system-Siena, political but not only, denounced at the time by the ECB and the situation of near-default in which he had come to see the bank after the acquisition at crazy prices AntonVeneta.
with the maxi-plan approved yesterday, we can say that MPS comes from the long crisis that began in 2007 with the acquisition of Antonveneta overpaid?
the maxi-operation announced two days ago, with the increase of up to 5 billion and securitization of loans by 27 billion, it represents a fundamental turning point in the history of the last years. We are at the final stage of a long restructuring started in 2012.
How was it possible to accumulate so many bad debts (27 billion) over the years so as to require a new intervention of these extraordinary proportions ?
Certainly in the past have been made mistakes in lending and more. The data show that since 2012 there has been a reversal of trend management, as evidenced by the data on the risk profile drop in new loans which fell by over 30%. It must be said in fairness that the deep recession of recent years, with the decline in GDP and industrial production, hit particularly SMEs which are largely our corporate customers. To which even in the difficult years we have never failed to lend our support.
What from ‘evaluation of the proposal at the last minute arrived from UBS and Corrado Passera, who yesterday was rejected by the board?
the MPS board has assessed the proposal of UBS and Corrado Passera but considered that there were no sufficient grounds and especially the time for an appreciation of the proposal, especially in light of the obvious comparison that for weeks we had been held with the European Central Bank Watch on the plane which was then approved. Personally, I am very surprised that a former banker experience CEO of Intesa Sanpaolo has presented an alternative plan so in extremis. In any case, it is positive that it registers an interest in the Monte that until recently there was not.
The ECB has asked you went public with a letter to divest within Npl 2018. Why did you decide to accelerate and solve the problem quickly and permanently? The market would penalize you, after such a negative outcome of the stress test? There were no alternatives less penalizing for current members?
The letter of the ECB was a response to a proposal that MPS had submitted in May in which he shared our objectives of NPL disposal in three years . The negative outcome of the stress tests, which roughly knew in advance, led us to accelerate the timing of the maxi-cleaning budget to avoid an impact on the confidence of customers.
The plan it is detrimental to existing shareholders but revives the bank. Feel that the shareholders will approve it without problems?
The priority was to give a clear and definite future at the bank. obbigazionisti fully protecting each category, from those retail customers. It was not granted, but we did it. The shareholders, who invest in venture capital, are called to a new commitment. We got to go to them a partial future dining with free allocation of equity securities of the maxi-securitization of NPL. Any impairment recoveries that will come from the sale of non-performing loans, will remain the property of the current shareholders of MPS.
It ‘possible that the shareholders pass of October is mild. I think it will be decisive credibility of capital plan and business plan that will be presented before the meeting.
From the Government indications that you had?
In general I would say that our maxi-plan represents a great victory of the Italian system. The Government has played an important role both in discussions with the EU commission that with the activation of government guarantees (Gacs) on senior tranches of securitization. Bank of Italy has played a valuable role of dialogue with the ECB. The entire financial system has built the fund Atlas has detected the tranche “mezzanine” securitization. Believing in the future MPS perspective and asking was, in return, the warrant that can give a share of future MPS up to 7% of the capital.
you have achieved a cure drastic In the last four years which led to the cutting of costs for 800 million, to reduce the workforce by more than 5,000 people, to an even delevaerage assets with the sale of several assets. From the industry perspective, the MPS still has a viable business model?
The business model is certainly sustainable from an industrial point of view. We are a commercial bank that has already been renewed technologically and with our online channels with Widiba. But the real breakthrough will come from the sale of non-performing loans and increased coverage for impaired loans at 40%. A totally cleaned up the bank, I will pass the word, will have a much higher rating and a cost of funding among the best of the system. If we add to that we are over the focus on credit adjustments, it is clear that the profitability can become very important. I seem to have perceived an interest that until recently it was not noticeable.
ECB will asked on several occasions to proceed with an aggregation which so far has never realized. The cleaning of the accounts and the increase from 5 billion makes more palatable the bank for a partner? Or, on the contrary, it puts it in condition to proceed stably alone? In Siena, and not only that, we hope. What do you think?
To Mps aggregation is no longer a necessity but a voluntary option.
Compared to the current market capitalization, the ‘capital increase of 5 billion and’ almost an IPO. Also after the sale of NPL to some sort of bad bank, MPS appears as a new good bank. Also intends to manage this new phase, or considers its mission accomplished?
The sale of Npl we are protagonists of remedial action but also innovative and open-track for the entire system that stimulate and accelerate the modernization and transparency. Values that have always guided, from the beginning of the consolidation path. In this sense, beyond the understandable technical definitions, I believe that you actually can not define a new MPS good bank, but a good Bank that in these four years has strenuously worked to be recognized as such. Mission accomplished? Certainly the one that has been accomplished is a phase of extraordinary importance, my mission continues unchanged.
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