THE BAG LIKES THE POPULAR FORMULA
THE FASHION OF CAPITAL INCREASES IS SPREADING
The world goes upside down. Until a few weeks ago the capital increases of the banks were the bogeyman most feared by the world of finance. On the contrary, as demonstrated by the proposed increase of Banco Popolare, but also by the forthcoming recapitalization of Bpm, today the market is chasing the "clean-up operations" of European banks, an obligatory step in view of the Asset quality review by the ECB inspectors. In line with George Soros' statement that "my staff can't wait to make a mountain of money with European institutes starting from the weakest situations". In addition to commercial real estate, judging by the purchase of 5% of Igd, the company that controls Coop's shopping centres.
But let's go back to the banks, especially the Popolari, already identified by the Monetary Fund as the weak link in the Italian banking system. But weakness, in finance, is a close relative of buying opportunities, or the hope of being able to buy at the right time and benefit from restructuring. The "banking revolution" triggered by the passage to the control of the ECB will be, according to the operators, the accelerator of both system reforms and capital strengthening as well as the starting point of the aggregations between the institutions of the category around the strongest banks. Therefore, great importance is attached to being the first to move with clear ideas and strategies.
Hence the appreciation for Banco Popolare which on 31 March will start the increase from 1,5 billion (a figure equal to its capitalization) which boasts global coordinators of the caliber of Ubs and Mediobanca, is the only stock capable of challenging fears about the Ukrainian crisis. Thanks to the business plan, judging by the promotion of Deutsche Bank, it raised its rating to buy from hold and the target price to 2 euros per share from 1,4 euros after the presentation of the business plan last Friday, on the eve of the shareholders' meeting. According to analysts, this plan is "credible" and conservative with regard to macroeconomic assumptions and cost projections.
Despite possible short-term volatility due to the capital increase, experts point out that capital strengthening, balance sheet cleaning and medium-term objectives are positive factors that eliminate the main concerns surrounding the bank.
The same can be said for Banca Popolare di Milano +1%. The institute, under the guidance of Giuseppe Castagna, intends to meet the deadlines by carrying out the capital increase (500 million) by the end of April. The new leaders in Piazza Meda have rejected pressure from within to postpone the operation, aware that in these times those who arrive late have bad lodgings and there is a risk of crowds on the capital market in the coming months.
Confirmation is the nervousness that accompanies Banca Popolare dell'Emilia Romagna in Piazza Affari. The institute has not abandoned the objective of Banca Popolare dell'Etruria e del Lazio, also pursued by the Popolare di Vicenza (which has launched a capital increase for one billion). But the Modea institute has not yet resolved the uncertainties about the future. Despite the denials, analysts believe that in view of the asset quality review, the bank will decide to reinforce the capital by 400 million euros. Something more will be known on Wednesday when the bank reports its 2013 results.
Surprise announcements don't always help. Banca Popolare di Sondrio is down in Piazza Affari after the board of directors decided on Friday to propose to the shareholders' meeting. But the operators' reaction can mainly be explained by the general bearish climate, in the wake of the events in Crimea. And then the bank has been very careful to underline that the increase will not serve to cover holes. The institution chaired by Piero Melazzini claims in a note that "the current assets of the bank allow compliance with the current limits set by the Supervisory regulations" and explains that the choice "to propose to the shareholder base and the market an increase operation of the share capital is first and foremost based on the company's positive progress and, therefore, on the prospects for further development of the group» and, therefore, «on the ability to actively compete, in an ever more incisive way, in the reference markets».
It is considered highly probable that a similar decision by the will soon follow Valtellinese credit as of 30 September 2012, the situation on the credit front was not very light: from the end of 30 to 33 September, net non-performing loans had grown by 32,5% while the coverage ratio for total non-performing loans was XNUMX% . An increase from a few hundred million seems imminent.
The list doesn't end there. In June there will be the increase of Carige (800 million). It is easy to bet on two transactions arriving on Veneto Banca (500 million) and on Banca Marche (400 million) in line with the wishes of the Bank of Italy. But the mother of all increases hangs over all the initiatives: Monte Paschi, 3 billion to be found by June to avoid the shipwreck or nationalization of the third Italian institute.
