It will not be easy to recover from an epochal shock like that of Unicredit. The entire Milanese financial community is stunned and will remain so for a long time. “For us – says one of our most brilliant money managers – it is comparable to the Madoff case: when you make a capital increase you factor in a fall in the stock on the Stock Exchange, but not like this. Those who have invested in Unicredit in recent years know that they will never recover that money and are shocked".
Epochal shock, no doubt about it. For the speed and intensity with which value was destroyed. It doesn't happen every day, but not even every year to see the first or second Italian bank to lose more than 40% of its value in less than a week and be worth little more than the same capital increase just launched: 8 billion against 28 billion at the end of June and 69 billion before the subprime crisis of 2007. What will happen now in the bank in Piazza Cordusio? It will be the break up, will it be sold in pieces, will the new Chinese bosses arrive, will there be a new turnaround at the top or will the catchphrase of the Mediobanca-Unicredit merger return?
It is too early to say what the future of Unicredit will be, but at least three things are certain:
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Unicredit remains a solvent bank, but it will no longer be the same as before;
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The fate of Unicredit - and this is sad - is in the hands of the bank guarantee consortium set up for the capital increase and mainly by Bank of America and Mediobanca, which lead it together with other investment banks;
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The collapse of Unicredit opens - as first noted Marcello Messori in the interview with FIRSTonline of yesterday – a new season in the Italian banking system with the risk and insult of climbing at final prices.
The "Corriere della Sera" is right when it headlines "The Big Italians of credit transformed into featherweights: all together they count as Bnp-Paribas". "Today - writes the Milanese newspaper - Unicredit is worth a sixth of Santander and a third of Barclays, which in 2007 was less quoted than Piazza Cordusio".
And unfortunately, if the collapse of Unicredit is the most sensational, the fall concerns the entire Italian banking sector, which pays sovereign risk and domestic government bond burdens on its skin, once considered a prudent liquidity management choice and now treated by the EBA as more dangerous portfolio choices than those of foreign banks that have filled of toxic stocks.
“Intesa Sanpaolo – adds Corriere – is now worth less than half of UBS and a sixth of the English HSBC, while UBI and MPS are worth a tenth of Deutsche Bank”. The boom does not look in anyone's face and the current value of all the major Italian banks together is equal to half of Bnp Paribas which a few years ago had already bought the Bnl, fortunately subtracting it from the crafty ones in the neighborhood and relaunching it but under French control.
Banks such as Monte dei Paschi, Ubi and Banco Popolare come out of the stock market crisis in pieces and are worth two sous: Mps is now worth 2,5 billion, Ubi the same, Banco Popolare is worth 1,5 billion and Bpm less than a billion despite the increase of 800 million made in December.
Will Italian banks all become prey to foreigners? It's too early to tell, but the idea is not a far-fetched one.
