Few data are enough to illustrate the lowest level of quotations of the banking sector, bringing up the rear of the European markets. In Piazza Affari, on average, banks deal with 0,4 times the equity. At the turn of the millennium, a valuation of twice book values was quite common, but prices of 3-4 times were not lacking.
Escape from the world of credit it can be explained by the fear that the crisis has impacted the quality of loans to the point of compromising the solidity of the institutions' assets. Yet our home system has certainly done its homework in recent years. In 2015, high-risk loans represented 17% of the total against 5,7% in Europe. Today we have dropped to 6,8% while the European average is around 2,9%. That is to say the gap narrowed from three to two times.
But this effort is not enough to attract the interest of investors who continue to defect from the sector, either for the high risks, or for the modest profitability: the lowest level of interest rates makes it very difficult to make profits as, among other things, testifies to the low return on capital (around 3,8%, too little to remunerate the shareholders adequately). All this despite a policy of severe personnel cuts (from 360 to 280 employees) and a corresponding cut in branches.
It fits into this picture the risk of the system, already launched in Italy with Intesa's takeover bid on Ubi, first act of a movement that was necessary and probably much faster than in past operations which, more often than not, arose under the banner of rescues. Today, on the contrary, the industrial logic imposed by the costs of the system prevails of risk monitoring and accounting required by the authorities who impose investments that often not even medium-sized banks are able to support. Also thanks to the stellar performance of ubs in the third quarter, the entire banking sector was in the spotlight on the stock exchange on Tuesday morning.
Judging by the market trend the most credible and closest operation concerns the merger between Banco Bpm (+3,8%) and the Italian part of Crédit Agricole, already allies in consumer credit in Agos. The affair, advocated by the CEO of Bpm Giuseppe Castagna ("after Intesa-Ubi - he said - banks of our size are too small") could see the light in the first months of 2021. The only possible obstacle is represented by the golden share also envisaged for the banking sector. A part of the system does not like a greater French presence strengthened by the landing of Amundi, the management giant controlled by Agricole, in Anima holding.
The other most popular move concerns the Unicredit-Monte Paschi combination. The operation would have a strong industrial sense, if only to reduce the gap between the institution led by Jean Pierre Mustier and Intesa. But the financial hurdles are high. Marriage, as Mustier himself says, requires a high dowry, probably no less than 4 billion in the face of the problems that still afflict the Tuscan bank, not least the legal costs of the various lawsuits.
Other operations seem more distant in time. Much will depend on the evolution of Mediobanca's strategies, rather than on the ambitions of Bper (+7,9%), grappling with the integration of the former UBI branches. There is great effervescence among the possible preys, from Banca Profilo to Creval. Also Mps Bank, after the signing of the Dpcm by Prime Minister Conte which authorizes the transfer of NPLs to Amco, warms up the engines for privatization and jumps by 5,27% in Piazza Affari.
But a third wave is already announced, even more spectacular: the ECB believes that the time has come for cross-border operations. In this case, Unicredit will be the number one suspect, but Intesa will not stay behind.
