Posted on Dec. 2020 at 19:18Updated Dec 18. 2020 at 19:19
The world’s oldest bank still in operation is preparing to be taken over by a competitor. Saved by the Italian state in 2017, Banca Monte dei Paschi di Siena (BMPS) confirmed on Friday its intention to carry out a capital increase and to join forces with another credit institution. UniCredit, whose boss Jean-Pierre Mustier recently announced his departure next April against the backdrop of strategic differences with his board, appears to be the natural candidate.
Before any merger, however, the Sienese bank must proceed with a capital increase, as it indicated Thursday evening during the presentation of its 2021-2025 strategic plan. This plan will be submitted by January 31 to the Ministry of Finance, which represents its main shareholder, as well as to the European Central Bank (ECB). Faced with losses of 1.5 billion over nine months, a capital increase is inevitable. This will be between 2 and 2.5 billion euros, the bank said.
With the crisis linked to the pandemic, the bank in structural difficulties sees its accounts deteriorate. The new strategic plan intends to keep CET1 above the 12% threshold (against 12.9% at the end of September and 13.4% in June). But it does not provide for a balance of accounts until 2022, before a return to profits by 2023. A further reduction in the workforce of 2,670 employees (out of 22,000) has been announced. At the time of its restructuring in 2017, marked by the entry of the Italian Treasury to the tune of 68.2% of its capital, the bank had undertaken to reduce its workforce by 20% in four years.
At the same time, BMPS will mobilize all its efforts to find a buyer and promote the withdrawal of the State, as the bank informs the 1,400 branches. A condition imposed by the ECB for its rescue. The buyer who would be privileged for the moment remains UniCredit, to the presidency of the board of which was recently appointed Pier Carlo Padoan, former Minister of the Economy who carried out the nationalization of BMPS and former Member of Parliament for Siena.
The Italian government will soon specify tax relief measures to facilitate bank mergers. The Treasury is also studying a plan to transfer the bank’s legal risks to another public entity. The shareholders, victims of years of mismanagement, have taken legal action and are demanding 10 billion euros in compensation.
Intesa reviews its dividend policy
Intesa San Paolo will review its dividend policy. This is what the daily “Il Messaggero” reported in revealing the convening of an extraordinary meeting of the board of directors of the main Italian bank this Friday. It aims to assess the recent recommendations of the European Central Bank (ECB) on dividend policies, without taking any decision. But its managing director Carlo Messina could propose the payment of dividends of up to 1.2 billion euros or 15% of its cumulative profits for 2019 and 2020. This corresponds to the ceiling set last Tuesday by the ECB which relaxed the general ban on the payment of dividends and share buybacks decided during the first wave of Covid-19. Commenting on Intesa’s results, Carlo Messina had already declared “ convinced that it is one of the banks in the best position to be able to resume paying dividends once the ECB allows it “.