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Siena, 8 Nov – Per Mps 2020 risks being another annus horribilis. The Monte dei Paschi it lost 1.5 billion in the first nine months of the year of Euro. A disastrous situation that damages all Italians. We recall, in fact, that the majority shareholder of the group is the Italian State (the Ministry of Economy and Finance holds, overall, 68.2% of the share capital). Rebus sic stantibus, a new capital increase is urgently needed. Put simply: the shareholders (that is all of us) must, albeit indirectly, get their hands on the portfolio.
The capital increase of Mps
It is not the first time that the Italians have kept the Tuscan giant on its feet with their money. The management made many mistakes, but the taxpayer has always paid. This is not vulgar populism, it’s the numbers that speak. Let’s take a small step back.
In December 2016, to prevent MPS from ending up in bankruptcy, the state intervened and owned 68% of the institution. The commitment of the then minister Padoan (now president of Unicredit) was to put the credit institution on the market as soon as possible. Things turned out differently. The Treasury paid the shares 4.8 euros today are worth 1.2 euros. A real bargain. We have lost 7 billion so far. And now there is talk of a 1.5 billion capital increase. Perhaps the measure is full. We are scandalized by the annuities and do not see what happens in our credit system. It must be said that we do not have many alternatives. The government has pledged with Brussels to sell the bank by 2022, but who would buy MPS?
Today, the fourth Italian banking group is in deep trouble. Rocca Salimbeni recorded a loss of 451 million in the third quarter, impacted by non-operating costs of 569 million, mainly attributable to provisions for legal risks (approximately 768 million) and restructuring costs for staff departures.
Legal disputes
The issue of potential refunds cannot be underestimated: compensation claims are potentially worth up to 10 billion of Euro. Obviously, it is unlikely that all savers will be compensated. In recent days, however, the situation has worsened considerably. Alessandro Profumo and Fabrizio Viola, (respectively former president and former managing director of Mps) were sentenced to six years in prison for irregularities in accounting for financial statements for the alleged “incorrect representation” of the Alexandria and Santorini derivatives in the bank’s accounts and accounting documents. It is true that this is a first instance ruling, but it certainly does not entice anyone to buy the bank by 2022.
The rumor circulates among the well-informed that to make the Sienese institute attractive, the Mef could ask for a capital increase of 2.5 billion. A figure that would serve to manage about 6 thousand redundancies. To this would be added 3 billion in tax credits. The Ministry of Finance has its hands tied and is forced to accept even the less favorable conditions in order to get rid of the Tuscan bank. For the umpteenth time in Italy profits are privatized and losses are socialized. The end, therefore, is obvious: the Italians (shareholders without their knowledge) will compensate savers for the faults committed by the former millionaire executives of MPS.
Salvatore Recovery
