La first match of the road show it is played away, in the City of London and then moves to New York and closes the mini tour in Milan. And the task of the Banca Popolare di Milano delegation, escorted by Mediobanca, will certainly not be easy, as they will have to convince the managers to invest in the bank's capital increase underway between today and 18 November. Also because over the weekend, just to muddy the already muddy waters, news arrived of the investigations against the former president Massimo Ponzellini for obstruction of supervisory activities. The 148 million euro loan to the Atlantis/BpPlus company ended up in the crosshairs of the Milanese investigators, "a loan that - write the prosecutors in a seizure decree - appears incomprehensible, both according to the canons of good administration and, according to the anti-money laundering". But from today Bpm is trying to move on, even if the unknown Enzo Chiesa remains: The general manager has remained in his position to allow the take-off of the capital operation, but the pressing of the Bank of Italy for the total renewal of the ranks executives is certainly not finished. But here, in figures, is the offer that Bpm is presenting today to City fund managers.
The capital increase amounts to 799,4 million (of which 24,2 million will end up in commissions to the guarantee syndicate) against a capitalization of 670 million at last Friday's values. The new shares are offered at 0,30 euros (against a price of 1,465 euros on Friday) at a rate of 138 new bonds for every 25 ordinary bonds and 92 for every new convertible bond. The offer will end on the 18th, the negotiation of the rights on the 11th.
The bank presents itself to potential subscribers with disturbing numbers, such as to justify the strong discount on the Tarp: 40% against the 25% of the previous increases in Mps and Ubi. But the "generous" offer can be explained by the aims of the operation and the performance of the institution.
From the first point of view, it should be emphasized that the operation was made necessary by the impact of the higher capital requirements, costing 666 million (124 Tier 1 points). Bnac's loans are excessively exposed to the risk of the real estate crisis: 21,8 billion, an abundant 30% of credits. For these reasons inspections by the Bank of Italy had underlined the need for a massive injection of capital: 1,2 billion then reduced by a third to 800 million given the market situation. The cut will result in the non-repayment of the Tremonti bonds which involve annual interest expense of 4,5 million. Reading the prospectus, other risks loom over the bank. It is worth noting the possible adjustment on the sale price of Anima sgr to AM holding (up to 56 million) and of Bpm Vita to Covea (about 20 million linked to the Greek securities in the portfolio).
From a management point of view, it should be emphasized that roe (return on equity), as at 30 June, fell to 2,3% against the previous 3,7%. The industrial plan finalized in the summer envisages at least optimistic hypotheses on the evolution of the markets. In this regard, the data on the cost of funding is sufficient: the accounts are based on a spread between 5-year BTPs and swaps of 67 points for 2011 and 64 bps for the following two years. In reality, the spread exceeded 300 basis points.
