Contestability alert for the main Italian banks

The article by Luca Gualtieri, journalist of Mf / Milan Finance

The nightmare of the hostile rise and the barbarians on the back doors to afflict the Italian banks. A nightmare that has been repeated several times in the past, triggering formidable defensive arrogations. Those who have a good memory will remember that in the first months of 2006 it was precisely the concrete intentions of Santander in San Paolo to bring the Turin bank into the arms of Intesa under the direction of Giovanni Bazoli and Enrico Salza. For Emilio Botin, the powerful Asturian banker who died in 2014, it was not only a personal disqualification, but also a serious setback for Santander's expansion plan in Italy. The reaction of the Spaniards did not wait …

The Banca Lombarda, the institute born from the merger between the Credito Agrario Bresciano and the Banca San Paolo di Brescia, which in Bazoli had its own tutelary deity. To repel foreigners once again resorted to the weapon of fusion and, from the marriage with the popular Bpu Bergamo, was born Ubi Banca

When a few days ago the CEO of Intesa Sanpaolo is of back to talk about contendibilità the system The Italian bank, the memory of many observers went to the calls to arms of the past. But the badogy is only apparent. The substantial difference from the season before the crisis is that today the valuations of the banking system have drastically declined.

For Intesa Sanpaolo, for example, the price-to-badet ratio rose from 1.38 at the beginning of 2007 to 0.83 at the end of 2017, a ratio that declined further in the last month and a half. The value destruction was even more marked in the case of Unicredit where the ratio went from 1.3 in 2007 to 0.58 last year, a level substantially in line with the current average of the banking system Italian. The undervaluation of equities compared to equity is the result of a market environment that has strongly compressed income: it is sufficient to think that for Intesa the return on capital rose from 17.6% as a result from the merger to 10.9%, which remains one of the best values ​​in the sector, to such an extent that the institute led by Messina has always remunerated its shareholders in the crisis years. In any case, there is no doubt that Italian banks today are quoted at heavily discounted prices.

A situation that, as mentioned, has worsened with the very high volatility of recent weeks: and therefore, after riding like a train 20 months earlier, from mid-May to today. hui, the Ftse Italia Banks index has left almost 20% on the ground. In this context, it should be added the recent declaration of Messina: "In the last month, Intesa Sanpaolo has lost 10 billion euros of capitalization and, if it falls again 10, it becomes questionable". [19659003Leproblèmecependantn'estpbadeulementleprixUndeuxièmeélémentquirendaujourd'huilesystèmebancaireitalienparticulièrementvulnérableauxincursionsdel'extérieurestlastructuredecontrôleEndehorsd'IntesaSanpaolotouslesgrandsétablissementsdecréditsontdevenusdesconcoursavecunemisedefondsminimaleL'évolutionestlerésultatdesénormesaugmentationsdecapitalquicesdernièresannéesontbrisélesjambesdesactionnaireshistoriquesàpartirdesfondationsLesorganismesauxquelslaloiAmatoavaitconfiélagardedusystèmebancairesaignentpeuàpeupourmaintenirlesmajoritésoubloquerlesminoritésquibloquentlarouteverslaforêtDanscertainscaslaretraites'esttransforméeenunevoiepeuglorieusecommedanslecasdesfondationsdeMontepaschioudeCarigetandisqu'àUnicreditilyavaitplutôtunretraitordonnéLerésultatcependantn'apasététrèsdifférent:aaprèsladernièreaugmentationdecapitaldanslabanquedePiazzaGaeAulentilefrontcomposédeCrtCariveronaCarimonteManodorietCbadamarcaesttombéà42%seuiltrèsloinde13L'évolutionverslestatutdesociétépubliqueétaitalorsuneétapeobligatoirepourtouteslesanciennesbanquespopulairesquiayantabandonnélevotecaptifdevenaientautomatiquementcontestablessurlemarchéAfindefreinerl'appétitdesinvestisseurscertainsinstitutsontréussiàmettreenplacelesnoyauxderéférencedontlatenueàuneéventuellemontéeresteàdémontrerÀUbiBancaparexemple16%ducapitalestprotégépardeuxpactesd'actionnairesquiconcernentlesentrepreneursetlesinstitutionsdelazone:lesActionnairesUCIdeBresciaSindacatoetlePattodeiMilledeBergameLasituationdansBperBancaestplusmagmatiqueoùauxcôtésd'Unipolquiestmaintenantà1506%ilyaunblocdefondationsetd'entrepreneursactuellementattestéà11%mêmesilapartn'estpbadyndiquéeBancoBpmsembleêtrecomplètementnonprotégéàl'exceptiondespetitesparticipationsdétenuesparlesfondationsLuccaetCariveronaetparcertainspartenaireshistoriques[19659003] In such a scenario, an investor would have a good con making game of the major Italian banks. with an expense in all contained. According to a simulation made by MF-Milano Finanza, it would be enough to invest just over nine billion euros to acquire the relative majority of Intesa, Unicredit, Banco Bpm, Bper and Ubi. By placing this figure on the plate in fact one or more subjects could exceed the share of the historical shareholders, ask for the convocation of the meeting and propose to the market a project alternative to that of the current management groups. Something similar to what Elliot did in Telecom or, going back further in time, to what was done by the TCI hedge fund with the Dutchman Abn Amro in 2007. "To have a public company in hand, just a quota between 5 and 10%. With this participation, an investor can request the convening of the meeting and obtain the consent of the market, "says Andrea Di Segni, managing director of Morrow Sodali, at MF-Milano Finanza. If in sum the threat is plausible, for the moment it is not yet concrete. If, however, new stock market crashes further reduce the value of the securities, the domestic banking system would be served on a cash base to foreign funds and banks.

Article published on Mf / Milan Finance