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Subtly, subterraneanly and indirectly, there are a thousand ways that increasing the spread between Btp and Bund does damage in Italy. Unicredit at these days gave yet another demonstration. The group issued a senior non-preferred bond as it did
last January. The fact that in January we are paying a 70 basis point higher interest rate than the European swap rate, while
now the "premium" status of 420 basis points.
This time, the bond was issued in dollars (the 420 basis points represent the cost in euros) and was sold to
a single investor (the Pimco fund). But the knot is in the cost: the same bank to issue the same type of security had to multiply the rate of interest.
Not because UniCredit has deteriorated since January, but because the market now considers a bigger risk: Italy. Even the Vice President
from the European Commission Dombrovskis reiterated that this increase in rates for UniCredit was due to market turbulence. And that worries the bankers
Italians: We can not afford to trade at such high rates, he said yesterday the CEO of Banco BpmGiuseppe Castagna. The rate paid by the impressive UniCredit added the number one in Italy of Crédit Agricole, Giampiero Maioli.
Estimate of the financing needs of the main Italian banks in 2019. Data in billions of EUR (Source: Deutsche Bank)
The problem concerns the entire system, because in 2019, the need to raise funds will be considerable. According to
According to estimates by Deutsche Bank, the 7 largest Italian banks in 2019 will have more than 45 billion bonds that should be renewed with new bonds.
Not only that. ECB loans also expire in 2020, which bear the name of Tltro, but already a year earlier (so
in June 2019) 50% of these loans will no longer be used by banks to meet a requirement (not mandatory)
which is called the net stable funding ratio. Morale: also replace these loans (baduming that theECB does not decide to grant new ones), the need to raise funds from the 7 Italian banks would increase from 45 to 108 billion
Total. And that does not stop there. Because to meet also Tlac and Mrel requirements (these abbreviations indicate the "increases" of obligations
banks must prepare for a possible rescue), emissions could rise further.
Spread, because banks are at risk of recapitalization
Just in the year when the gap between BTP and the Bund makes the bond market high and expensive, Italian banks
so there are big financial needs. Well understood: the real numbers could be, fact-proof, inferior
estimates. Intesa Sanpaolo – contacted – says for example being able to meet the requirements of "rolling"
Mrel also without having to renew the bonds expiring in 2019. And UniCredit has already raised 2.6 billion of the 3-5 requests
to meet the Tlac "rollover" requirements. But the fact that the big banks have enough oxygen to be able to
keep the breath, do not change the fact: for them the cost of financing increases. Estimate Deutsche Bank that – by
the 7 banks – could increase in 2019 by more than a billion in total. To pay the bill could be families and
companies.
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