That the EU Commission had given the green light to permanence of the Treasury in the capital of Mps by affixing precise conditions, it was something the markets had been considering for a long time. The Treasury-Mef, or even more generically the State, in fact, he was unable to return Monte dei Paschi di Siena to private hands within the timeframe established with the agreement signed in 2017, with Brussels, on the precautionary recapitalization of the bank. Agreement that made the Treasury the largest shareholder of the institution.
The yes of the European Commission to a further presence of the State in the MPS had arrived at the beginning of August of this year: the Mef himself communicated the decision of Brussels, communicating in a note, in addition to the ok for the extension, the revision of Italy’s commitments.
It was specified that the contents of the decision would be made public by the European Commission in the following weeks, as is the practice in decisions on state aid. The commitments, stressed the Treasury, “were consistent with the objectives of the business plan recently approved by the bank “.
Equita SIM anticipated some of the revised commitments: “The European Commission has approved a series of compensatory measures proposed by the Mef including ‘sales and divestments, further closures of branches and the maintenance of the obligation to comply with certain restrictions on the methods of conducting banking activities ”approved by Brussels.
Yesterday evening Mps published a note relating to the EU decision on the revision of commitments: among the crucial points that are part of the new commitments undertaken by Italy in the face of the permanence of the State in the capital of Mps, important prohibitions are highlighted: the prohibition on making acquisitions, the prohibition on paying dividends, a ban on advertising using state aid.
There are also firm provisions that MPS will have to observe: such as the provision on NPL ratioor rather on the ratio of impaired loans, which must not go beyond 4%, even if a certain flexibility linked to market conditions is envisaged.
Mps, will also have to proceed with the sale of properties for 100 million euros and a series of shareholdings, including the shares it holds in the Bank of Italy. Just as it will have to reduce the leasing portfolio, close the Shanghai branch by 2024 and the French subsidiary Mp Banque.
Then there are certain parameters to be respected:
“By the end of 2024, the staff of the bank and the number of branches it must have been reduced to 17,634 and 1,258 units respectively; operating costs will have to reach 1.872 billion, with the ratio cost-to-income which will have to reach 60% (or an even higher level depending on the evolution of the market), with margins of tolerance and interim targets “, we read in Returning to prohibition on making acquisitions and on distributing dividendsthese are not applied unless MPS has 50-100 basis points of capital buffers on the minimum capital established by the ECB.
In the notes of the EU document it is recalled that “the bank did not sell the stake held in Bank of Italy, which has a value of approximately 190 million euros, just as it has not sold its equity investments in MPS Tenimenti Poggio Bonelli and Chigi Saracini SpA and in Immobiliare Novoli SpA ”.
The MPS stock today runs counter to the trend compared to Piazza Affari.
The stock trend, however, has nothing to do with that of last week, when for almost two sessions the shares of Monte dei Paschi they did not even manage to make price, marking theoretical drops of up to -34%, following the reverse stock split, in view of the long-awaited share capital increase of 2.5 billion euros. The title had subsequently been hit by strong sell off.
Capital increase which, it is rumored more and more often, would be destined to postpone to October 17, compared to the initially scheduled date of October 10.
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Mps: first shock that brings Giorgia Meloni and FdI back to reality. The note from Germany
A few days ago a Reuters article reported the rumor according to which the industrial partner of Mps, Axaaccording to what has been learned from two sources close to the dossier, he is considering the option of participating in the recapitalization of the Monte di Stato with a contribution of at least 100 million euros.
Both Axa and Anima Holding are in talks with the CEO of Mps, Luigi Lovaglio, looking for injections by the two commercial partners to raise, according to other rumors, up to 400 million euros.
In the background, investors’ fears remain about the Monte di Stato’s ability to raise 2.5 billion in fresh assets, of which 900 million in the form of private capital: 1.6 billion euros should in fact already be armored, insured by the majority shareholder, or by the Treasury.
Raising almost 1 billion euros from private individuals is certainly not an easy task, at a time when the diktat is sell on the markets, from Wall Street to Piazza Affari. The banks of the underwriting syndicate are well aware of this and, until a few days ago, they had not detected any concrete interest on the market.