The letter in which the European Commission asked the Italian government for explanations on decree law 133/2013, later converted with amendments, which allows the revaluation of Bankitalia's shares, risks opening Pandora's box again. The Commission suspects that behind the revaluation of quotas (from 156 thousand euros in 1936 to 7,5 billion today) state aid to Italian banks is hidden. With the joy of those who, often demagogically, shouted the sale of Via Nazionale fearing a gift to the credit institutions that would impoverish the public coffers and therefore the citizens.
The Commission's reminder is therefore another good opportunity to clarify some points, not really well clarified by a good part of the press. First of all, the 7,5 billion resulting from the revaluation are not funds that are paid to institutions. They come move away From stocks statutory to capital of Bank of Italy. From a financial point of view, therefore, there is no weakening of the institution. The revaluation of the shares allows the Treasury, as known, to collect a 12% tax on the capital gain from the banks, equal to approximately 900 million euros, already accounted for in the 2014 budget to abolish part of the IMU on first homes. In the face of this one-off payment, institutions can enter the revalued shares in their balance sheets, reinforcing their assets, with potentially virtuous effects on their ability to lend to the real economy and to comply with European regulations.
The law also provides that no participant in the capital can hold most of 3% of Bank of Italy shares. Unicredit and Intesa, which together own the 52,4% of the 300 shares, will have to sell on the market (to Italian investors only) the excess part. Here, according to some observers, lies a danger to public coffers. Let's see why. According to critics, when more than 3% of shareholders must have sold their shares on the market (within three years of the decree being passed), the danger may arise that the latter are not "appetizing" enough, and that therefore the Bank of Italy must buy them back paying out a portion of the reserves to the shareholders, financially impoverished. According to Via Nazionale this is a non-existent risk.
The solution to the "mystery" lies in the amount of dividends which Via Nazionale pays (and will pay) to the shareholders. A premise: Bankitalia also produces profits (the so-called seigniorage profits, ie the profits deriving from the issuance of money, the typical activity of a central bank). A part of the profits (40%) is destined for reserves, a part goes to the shareholders, the rest goes to the state.
Under the old statute, the Directory could pay shareholders dividends till 10% of the capital e till 4% of reserves. The latter amount today to about 22 billion. Of these, 15 represent the portion from which it is possible to draw to remunerate the shareholders. In total, with the old statute, up to about 600 million euros. In fact, the upper floors of Bank of Italy have (in 2012) paid dividends for only 70 million against a possible limit of 600.
With the new Articles of Association, things have changed: dividends can no longer be distributed up to the limit of 4% of the reserves (in addition to 10% of the capital which, however, was a purely symbolic amount, 15.600 euros), but profits equal to a maximum of 6% of the capital resulting from the revaluation can be paid to the participants. So 450 million (calculated on 7,5 billion). It is evident how, with the new charter, a lower ceiling than the previous one has actually been set.
Some point out that the problem lies in the actual attractiveness, on the market, of the excess quotas that will have to be sold. The reasoning is simple: if Bankitalia decides to continue paying a low dividend (such as 70 million in 2012), no one will want to buy the excess shares, because the latter will not be profitable enough. A dividend of 70 million on capital of 7,5 billion is equivalent to a gross yield of approximately 1%. Not much, even if it's totally titles risk-free. If, however, Bankitalia decides to pay dividends equal to the maximum limit (450 million), this would be equivalent to a return of 6%. Quite another thing. The titles would indeed be very rewarding for being risk free. The attractiveness on the market would be certain, Bankitalia would not have to shell out a euro to buy back the excess quotas, but the payment of a higher dividend would involve, according to the critics, a equal reduction in the share of the profit that goes to the State, with damage to the public coffers.
In reality, this danger too is averted, since with a statutory innovation the return on reserves (the latter are invested and therefore have a return), which previously was paid into the reserves themselves, will henceforth be liquidated to the Treasury. This return, on average, in the last ten years has been approx 466 million a year. It is clear, therefore, that even if the Directory decides to pay a dividend equal to the maximum threshold of 450 million, this outlay would be compensated by the payment to the Treasury of the aforementioned yields. There would be no perverse effect on public coffers and therefore on citizens' pockets.
What is less easy to understand is why the amount of dividends is not rigidly defined and is instead left to the discretion of the upper levels, indicating only a maximum ceiling. And why the banks are entitled to a share of the profits, since the shares they hold are virtually risk-free. It is also not clear why, notwithstanding the Articles of Association, the institutes that own shares over the 3% threshold will continue to receive dividends even on the excess portion. But from here to consider the complex revaluation operation a gift to the banks, there goes.
Problems, at most, could arise if the Commission were to decide that we are dealing with state aid. In any case neutral aid for public finances. But it would be a rather incomprehensible epilogue since several credit institutions already accounted for the shares at highly inflated values compared to the original value, equal to only 0,52 euros per share against the 25 thousand resulting from the revaluation. What makes this affair truly grotesque is that the Government had to resort to this financial acrobaticism to pursue Berlusconi's propaganda on the Imu.
