The hour of choices is approaching. Analysts and the entire financial community expect that tomorrow, in the conference call on the financial statements, the CEO Intesa Sanpaolo, Carlo Messina, say something more about the group's projects for Generali, though the launch of a real offer is not yet on the starting blocks. What is certain is that, if the Intesa-Generali operation were to go through, one would open new era not only for Intesa, for Generali and for Mediobanca, which is the first shareholder of the Lion of Trieste, but for the entire Italian financial system.
But doubts are legitimate and Messina, who has been meditating for some time on how to reposition and grow his Bank along the paths of wealth management (managed savings, private banking, insurance) after having made it among the most solid in Europe with a Cet1 of 13% and 715 billion in assets, has already put its hands forward, clarifying that "there will be no pirate operation" and that there are three inescapable stakes that will guide the bank's choices: assets, dividends and price. In truth, there are other risks as well: the difficulties of integrating banks and insurance companies, as revealed by the past failures of Allianz-Dresdner Bank, of Fortis, of Credit Suisse-Winterthur and the reverse of Ing, the possible vetoes of the Antitrust su the excessive concentration of insurance activities on the Italian and European market with the consequent "stew" risk, the need to downsize Generali's international presence especially in Europe and, above all, the danger of unwittingly pave the way for foreign predators been hunting for Generali's treasure for some time.
Thinking about all the possible scenarios in a situation more open than ever to a thousand solutions may be suggestive but that's what it's worth. Instead, what is already clear is the importance for the Italian system itself of a sensitive asset such as Generali and, at the same time, its intrinsic weakness. It may also be true that the Lion no longer has the magical aura that surrounded it when the company was supervised by Enrico Cuccia's Mediobanca and the secret rooms of the Trieste office were animated by mythical characters such as Cesare Merzagora first and then Antoine Bernheim and Alfonso Desiata, but Generali is and remains, with assets of 496 billion, a unique jewel on the Italian financial scene. For at least three indisputable reasons.
Firstly why the Lion has a treasury of 70 billion Italian public debt securities in its portfolio, of which it has always been and is a pillar of the first magnitude. Secondly because Generali are not only one of the very few large Italian groups by now but they are also one of the rare truly international large Italian groups, present in strength in Europe (Germany and France in the lead) but also in other continents (including China). Finally, with their leadership in the insurance policies market and their dynamic presence in asset management, Generali holds a large part of Italian savings and they are a fundamental lung of the Italian economy.
Too often the adjective "strategic" is used inappropriately, which is not a synonym of important but much more, but if by "strategic" we mean an asset that contributes significantly to the formation of GDP and which at the same time is “non-replicable”, there is no doubt that Generali has all the characteristics to be considered strategic not only in the financial system but more generally in the national system. What if Generali are strategic, it should come as no surprise that the establishment and its Authorities do their part to the end to defend their Italian character, in the name of an economic patriotism that would have appealed to a refined civil servant like Tommaso Padoa Schioppa (who knew Generali well, even for family reasons) and which can very well reconcile national interests with the rules of the market.
The events of recent days, opened by the first rumors about Intesa's designs, have highlighted the uniqueness of Generali but have also discovered the weak side is in governance that especially in his shareholding structure. The sudden dismissal of the general manager Alberto Minali after a few months of taking office it is only the latest act in a long and often surprising series of reversals which led to the divorce of the CEO last year Mario Greco from the company after only three years and, before that, the departure of his predecessor John Perissinotto, disheartened in 2012 after only two months of the general meeting which had confirmed him for the tenth time at the helm of Generali with a very large majority.
Since the chairman of Generali is a gentleman called Gabriele Galateri, who is one of the leading corporate governance experts in Italy, it is certainly not the formal rules of governance of the Lion that leave us perplexed, but their origin that finds the its greatest weakness in the Generali shareholding structure. It is entirely true that turbulence at the top is a bit in Generali's DNA if one only remembers that even two personalities who are in the pantheon of the company like Bernheim and Desiata often went from heaven to hell and vice versa and were crowned and dismissed twice, but then the great director of the Lion was the dominus of Mediobanca, the historic first shareholder, in the person of Enrico Cuccia. But today those times are over, Mediobanca is no longer the parlor of the bourgeoisie nor the clearinghouse of Italian capitalism e Cuccia has no heirs worthy of him. Aping his deeds can only lead to trouble.
La weakness of Mediobanca, which reflects his unresolved contradiction between his needs as an investment bank and those of a shareholder of the leading Italian insurance company, but also the insufficiency of the other principal partners of Leo, attentive more to the management of their real estate affairs or to the short-term yield of the stock market than to the interests of the company, are at the root of Generali's instability, despite its strength on the market and the skill of its managers. The conflict of interest inherent in the dual nature of Mediobanca reached its maximum expression just a few years ago, when the Piazzetta Cuccia institution, despite being the first shareholder of Generali, did everything possible to favor the marriage between Unipol and Fondiaria and to build the competing insurance pole of the Lion. The market and competition sheriffs weren't there or, if there were, they were asleep.
The truth is that Mediobanca continued to move and moves as if Generali were a province of an empire that no longer exists, but has not been able to guarantee stability and development to the company, which has not made a capital increase for over 15 years, and today would not have the means to defend the Lion in the event of a phase of takeovers and counter-takeovers.
An era is over and it's time to take note of it. The sooner a treasure like that of Trieste is secured, the better. As long as we don't forget that Generali is not the Comit but that Mediobanca no longer deserves them.
