As the countdown to the launch of thecapital increase of the Monte dei Paschi di Siena, la European Commission yesterday evening launched a document in which it specifies in 22 points some key passages of the Sienese situation with the review of commitments presented by Italy and approved by Brussels.
Il Mps title on the stock exchange it is under pressure : in the last 5 days he lost about 18 pct also due to the grouping of shares. Late this morning, 24,50 fell by 1,60 pct after hitting a high of 26,205 euros.
A decision is expected next week Consob on the 2,5 billion capital increase prospectus decided by the shareholders' meeting. The operation, essential for financing the redundancy plan, should be completed by 12 November, as contained in the request for delegation from the board of directors, while indications are also awaited from the new government (the Treasury owns a 64 pct share).
In last night's document, the Commission indicate double scenario. If MPS were to be sold by the state to another entity and continue to stand on its own, most of the industrial commitments signed between Rome and Brussels would remain in force.
However, if MPS were to merge with another bank, it would have to reduce its branches to 1.258 by 2024 (in line with the current plan) and sell up to 500 million of leased loans. The document does not indicate the release date of the Treasury, which in any case should not be less than 24-36 months.
According to the Sienese bank, the 22 points underlined by Brussels are in line with those already signed by the Treasury and are consistent with the objectives of the business plan 2022-2026 of the CEO Luigi Lovaglio. "The objectives presented in the decision therefore endorse the guidelines of the plan, the implementation of which is underway and in line with the expected timescales" says a note from the Sienese bank.
Prohibition of expenses and commitment to sales, disposals, staff reductions, salaries and branches
In the document Brussels first of all confirms the ban on acquisitions, of distribute dividends (unless Siena does not have a sufficient capital buffer) and of leverage public support to gain market share.
The tightening on salaries, the reduction of personnel and the reduction of branches is then reaffirmed. But divestments of properties and non-core equity investments are also envisaged.
The salary total of any employee (including managers) may not exceed 10 times the average employee salary. By way of derogation, the bank may adopt a remuneration plan for senior executives which may provide for variable remuneration in excess of the fixed ceiling.
Le branches they will have to drop to 1350/1370 by 2022, to 1300/1350 in 2023 and to 1258 in 2024 (while CEO Lovaglio estimates 1.218 branches at the end of the plan).
I employees they will have to drop to 20/21 thousand within the year, 18/20 thousand within the next and to 17.634 in 2024: also on this front the new plan goes beyond the EU requests themselves, and the 4 thousand requests for early retirement already on Lovaglio's table could allow the target to be achieved as early as the end of the year, should the increase (and the relative financing of the operation) be successful.
I deposit rates must be in line with the market, the bank's balance sheet will not be able to grow beyond 140-150 billion.
Disposals of approximately 200 million from properties and non-core equity investments
The Dg Comp also imposes a lightening of assets: Mps will have to sell real estate for about 100 million, e sell shares non-core assets held in Visa, Bancomat, Veneto Sviluppo, Mps Tenimenti Poggio Bonelli and Chigi Saracini and Immobiliare Novoli, for a total value estimated at around 80-90 million.
Alternatively it will have to liquidate its stake in the Bank of Italy by 2024. In terms of cost/income, target of 60%, in line with the business plan.
On the front of credits, the NPL ratio threshold set at 4% and the sale of around 500 million is expected lease.
The roadmap for the capital increase has its eyes on Tesoro, Axa and Anima
Meanwhile, work continues in view of the launch of the capital increase of 2,5 billion. The goal of starting on Monday 10 October having vanished, now we are looking at 17 October as the new departure date. In the middle of next week, probably Thursday the 13th, pending the ok to the prospectus by the Consob.
The document should contain commitments to subscribe by some investors, as well as the Tesoro same which will put 1,6 billion: about a third of the remaining 900 million should come from the two partners Axa e Anima, with which negotiations continue.
According to some observers, the support of the two commercial partners would be smaller, around 300 million, compared to the 400-450 million previously assumed. Anima he recently asked for a substantial revision of the commercial agreements in the face of the willingness to put up to 200 million on the table, but MPS has not given any indications for fear perhaps of making the bank less attractive. Instead Axa, again according to some observers, would not ask for a revision of the agreements, but would not be willing to spend more than 100 million to subscribe to the capital increase.
On the Stock Exchange Soul Holding share in Paris up 3,40% to 3,17 euros
