Banca Monte dei Paschi closes its annus horribilis marked by the Alexandria derivatives scandal with a loss of 3,17 billion euros. Red was widely expected but is still higher than analysts' estimates. Under pressure also from the Bank of Italy, adjustments were made for 2,67 billion, of which 1,37 billion in the fourth quarter alone. The securities and derivatives portfolio at the end of 2012 amounted to 38,4 billion euro, up by one billion on the previous year and with exposure concentrated on Italian government bonds. In the fourth quarter, the aggregate benefited from the recovery in the value of securities and the downward spread.
The bank, engaged in an extensive restructuring process, has already closed 200 branches, 50% of the branch reduction target contained in the business plan to 2015, and has already made early departures of 1.000 of the 1.660 employees who will have to leave the bank by the end of the first half of 2013. Restructuring costs were incurred in the 2012 financial statements one-off payment of approximately 300 million for redundancy incentives for redundant personnel. “We must speak of a turning point” and “today the bank is very different from the recent past. The discontinuity also takes place in a difficult year for everyone, both banks and the system”, commented CEO Fabrizio Viola in the conference call with analysts on the accounts.
In more detail, revenues fell by 6,2% to approximately 4.995 million due both to the 18,1% decrease in the interest margin and to the 7,4% reduction in net commissions which mainly discount the costs of the guarantee government necessary for access to refinancing operations in the ECB (Ltro), against a slight increase in the commercial components. Coverage of non-performing loans increased to 57,9%, up 250 bps compared to 31 December 2011. The dynamics of direct funding was affected by the decline in funding from institutional counterparties, while commercial funding remained substantially stable ( -1,6% on 2011). The trading activity amounted to 454 million compared to 72 million in December 2011. The cost-income ratio was 66% (64,2% in 2011). The tier is 11,9% pro forma e Core tier 1 at 11,3%, including Monti bonds.
