"It always goes on". So the president of Banca Mps Alessandro Profumo at the exit of the board that approved the quarterly of the bank. However, the market is still wondering where: the stock lost 6,48% today. And even before the new 1,15 billion red line was unveiled, of which 797 million in the single quarter, 300 million in provisions to cut personnel costs and a portfolio of non-performing loans that soars to 24,3 billion. This is the tenth consecutive loss, archived above all as a result of loan adjustments amounting to 2,46 billion, of which 1,25 in the last quarter and largely due to ECB examinations (for 790 million).
In the Conference call with the analysts, the CEO Fabrizio Viola he wanted to underline that the ECB itself "said that the quality of loans was impacted by the bank's expansive policy in 2009-2010, by the below-average Antonveneta portfolio and by the standards for loans in past years", noting that "the results of the third quarter confirm that the activities undertaken have proved to be effective, operating margins are better and we have managed to contain costs". In three years, the bank has cut 760 million costs and, according to the agreements signed with the trade unions last summer, the closure of 150 branches is expected by the first part of 2015. “I believe that the results presented should be evaluated in the thanks to them” he said speaking to analysts adding that “it is important to underline that we are committed to improving the situation and finding a solution to the problem, which we know cannot be found in the short term”. The same effects of the ECB's Asset Quality Review will weigh on Montepaschi's accounts in the fourth quarter of 2014 as well.
The strengthening plan, Viola said, was sent to the ECB last Monday but at the moment it is not known how long it will take the Eurotower to respond (it is said a month). The definitive amount of the increase, up to 2,5 billion, will in any case be decided only next year when it will be launched and will also depend on whether or not the discount requested by the bank from the ECB is granted for 390 million and on the 220 million transfers not expected cores decided by the bank and included in the capital plan. "The important thing for us is to cover 100% if not more of the capital deficit and repay all the Monti bonds", said the top management. Meanwhile, the European Commission has indicated that the new capital increase does not interfere with the implementation of the restructuring plan approved last year.
INCREASE, AND THEN?
Mps has mandated the two advisors Ubs and Citi "to identify the best options to allow the bank to operate serenely". But the market is desperate for a white knight to ferry the bank out of the shallows with a solid tow before the waves carry MPs adrift. On the contrary. There are those who, like the Financial Times, suggests (in an article published on Tuesday) that it's time for an aggressive investor to make a stew of it. This would be the only viable option, given that a state bailout is an out-of-the-box option, a marriage within borders a complicated solution (and then there don't seem to be any candidates brave enough given that both Intesa, Ubi and Mediobanca readily agreed fashion shows) and the descent of foreign outsiders seems unlikely (there have been rumors of an interest by Bnp Paribas, however denied by the French bank. For the city newspaper, there are several elements that suggest this scenario: the increase from 2,15 billion will take place in mid-2015 and until then the bank will be exposed to the winds of speculation; MPS's shareholders are well occupied by speculative investors; the numbers of the accounts do not turn around and the bank is destined to struggle (and suffer) for a long time.
SUFFERING OUT, FOLLOWERS IN
Meanwhile, Viola tries to get out of the tunnel by thinking about how to buffer the deterioration of credits and how to hook up to the technological revolution that will change the face of banks in the coming years. Viola has hinted that he intends to launch an operation along the lines of what UniCredit and Intesa Sanpaolo are trying to do with Kkr. "We need to work internally, trying to improve the situation, but also externally, finding solutions to outsource a part of the non-performing portfolio". Among the transfers, that of Consum.it could finally arrive, for the entire company or just the assets, for which Mps has received some binding offers.
Positive numbers instead come from the new one Widiba online bank, who established contacts with 40 new followers on social networks and 8 new account opening requests. "We are confident in the success of this new bank - said Viola - and by the end of the year it will be equipped with 650 promoters who will add to the existing MPS network". Interbank exposure decreased by 8,4 billion and today amounts to 22,5, of which 17 billion from the ECB: 14 are related to the old Ltros, 3 to the new Ltros.
