In accordance to rebuilt by Republic, the public shareholder (68.5% of the Sienese bank) is trying to settle the game by December, the date from which the European Central Bank will ask for a capital increase of up to one billion, linked to the Hydra operation, the spin-off of over 8 billion of difficult loans in favor of Amco: a step that must be approved by the shareholders’ meeting on October 4th. Unicredit – which gave a “no comment” on the game – would have asked for the guarantee of a financial framework of “absolute neutrality” regarding the impact on its capital.
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Unicredit sets the conditions for taking Monte dei Paschi
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Meanwhile, the Unicredit action is down on Piazza Affari (follow live), also affected by the opinion of Credit Suisse: the Swiss broker lowered the recommendation to “neutral”, confirming the price target at 9.5 euros. The investment house, while underlining that Unicredit is a well-managed institution with a solid capital structure and good cost management, nevertheless sees little appeal for an increase in short-term estimates on profits and ROE 2021-22.
The Equita analysts, on the other hand, focus on the hypothesis of intervention on Mps: “Assuming that the acquisition may require 2 billion in integration costs, we estimate that to be neutral in terms of capital, a recapitalization of approximately 4 billion is necessary (without considering the coverage of legal risks) – calculate the experts of the SIM – We believe that the hypothesis the resources already allocated by the Mef (1.5 billion) are sufficient to proceed with the spin-off of the npe (non-performing exposures) to amco and complete derisking, but they may not be sufficient to make the bank even more attractive in terms of m & a, even assuming an intervention by Unicredit “. On the other hand it is rising (follow live) Mps.
The point on the situation of the Sienese bank was today the subject of the hearing, before the Banks commission chaired by Carla Ruocco, of the managing director of Rocca Salimbeni, Guido Bastianini. Of the hypothesis of sale to Unicredit he said: “If the Ministry of Economy, which is the current reference shareholder, decides if and when to sell the bank, this is part of a negotiation in which the management is obviously not involved “.
The manager spoke of the Hydra deal on difficult loans as “a key opportunity to significantly reduce credit risk”, stressing that it could also “provide real prospects for a return to profitability”. Following the covid, it is “reasonable to predict an increase in the default rate over the next two years”, he explained, indicating the consequence “of a worsening of the gross npl ratio for the two-year period 2021-2022”. In recent years, however, he remarked, “there is a reduction in the stock” of non-performing loans “much better than that agreed with Europe thanks to a series of managerial actions that have made it possible to change the organizational structure and the system of control of the credit function “.
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