From the ordinary shareholders' meeting of MPS it emerged that the absence of a quorum (20% of the capital) prevented the extraordinary meeting which had to approve the reduction of the capital to cover the 2016 losses equal to 3,4 billion euros . In the meantime, however, the declarations of CEO Marco Morelli show that the new restructuring plan of the MPS, currently under discussion with the European authorities, will envisage “much more stringent” attitudes on revenue and cost targets and now the bank is discussing with the Commission the levels of redundancies that will be foreseen in the new plan, compared to those indicated in October in the 2016-19 plan.
“The plan – Morelli explained – will have to realign revenue and cost forecasts with much more stringent attitudes. We have told our counterparts that we must arrive at something that is a fair compromise and that gives the bank the possibility to resume its path". As for the specific issue of the impact on employment, Morelli said that "is one of the issues under discussion", explaining that the EU Commission's approach "is from a restructuring plan, which means affecting the growth dynamics of revenues and costs. I'm not able to give numbers, we will explain later what it means in terms of employment levels”. The plan approved in October and now outdated, envisaged 2.600 redundancies in 2019 but according to a source close to the dossier, the Commission's request could aim to double those cuts and the negotiation would be underway on this. The return of the MPS share to the stock market also depends on the approval of the new plan by Brussels.
“We have lost 28 billion in commercial funding – Morelli also told the shareholders' meeting -. There is absolute awareness of this. Recovering 28 billion takes a very long time, it will take years. It is useless to talk about unrealistic things. Faced with a difficult situation, as employees of MPS, myself included, we can decide not to do anything, to do something else in life, or we can pull the cart and move forward”, added Morelli.
The capital requirement requested by the ECB from Monte dei Paschi remains that indicated at the beginning of the year: the 8,8 billion that emerge from the shortfall of the 2016 stress test. "We are working on the plan with that quantitative reference", said the managing director Morelli in the press conference at the end of the meeting. Morelli did not want to give details on the plan for the ongoing negotiations with Brussels.
Not even "the horizon of the plan is defined," he adds. It is useless to ask the top manager if, for the sale of the stock of non-performing loans, the bank prefers to go back to studying a securitization rather than a non-recourse en masse sale. "Our hope is that an agreement will be found that will set in motion the initiatives to deconsolidate bad loans", which in the meantime have risen to 29 billion.
Therefore, they are only "wishes" that Morelli and the president Falciai express in the press conference on the characteristics of the restructuring plan. One of these is that the bank is able to sell the mountain of non-performing loans without losing too much in terms of price. The only certainty expressed by the top management of the Rocca Salimbeni bank is that there will be no delisting of the stock suspended in Piazza Affari from December.
However, the suspension affected the lack of quorum for the extraordinary meeting: "We expected it," said Falciai, but it's not a problem for the bank: the reduction of the capital to eliminate the 2016 losses will be proposed at the next extraordinary meeting, the one that will approve, probably within the summer, the capital increase by the State which will become the first shareholder with 70% of the capital.
