The ambition of aggregation between Mps and Mediobanca is that of “building the third competitive force in the Italian banking sector". This was stated by the CEO of Monte dei Paschi Louis Lovaglio during a long interview given during a banking conference organized by Morgan Stanley in London which in recent days also hosted other banking CEOs such as Andrea Orcell and Giuseppe Castagna and Alberto Nagel.
Lovaglio: “Mediobanca’s stake in Generali is not crucial”
During his speech, Lovaglio said that the share in Generali that Mediobanca will bring as a dowry "it's not crucial” for the overall project. Generali, he continued, “generates profitability, we are happy about it but it is not crucial for the potential” that the bank wants to express with the aggregation. Lovaglio also recalled that the relative contribution of Generali in the new combination will be lower than the current one for Mediobanca. “While today the Generali's contribution to Mediobanca's profits is 40%, in the other scenario It will be around 16%. In the context of what we’re creating, spending more time with what represents the remaining 80% of the business gives us a different representation of what this combination is.”
The Lion, the banker continued, “offers us options for the future in terms of cooperation but for us what matters is creating a competitive force in the Italian scenario”.
Returning to Mediobanca, the merger offers the opportunity to “further remunerate our investors“, Lovaglio specified, stating that MPS will have the capacity to distribute 100% of profits while maintaining a capital ratio of around 16% “which means that we are not losing what we have today stand alone”.
Lovaglio responds to Nagel: “Dissynergies will be minimal”
The number one of Rocca Salimbeni has replied remotely to the CEO of Mediobanca, Alberto Nagel, who a few days ago, again at the Morgan Stanley conference, had said: The public exchange offer launched by Monte dei Paschi is not positive for us, nor for our shareholders”, also speaking of “important dissynergies, concentrated in the private and in 'investment banking, where obstacles will materialize on the revenue front.”
According to Lovaglio, however, the dissynergies of the operation "will be minimal and we will manage them in the best way by paying close attention to the customers and people" of the bank in Piazzetta Cuccia, especially those active in the personal and investment banking sector.
Lovaglio: “Authorizations by the end of June”
Speaking about the timing, “We expect to have the necessary authorizations by the end of June to then start with the takeover bid”, specified the CEO of MPS, recalling that the assembly of the Sienese bank has been called for April 17. Towards “mid-July we will complete” everything.
Lovaglio: “Very low risk that the Government will review DTA”
The top manager of Siena in response to a question on the possibility that the Italian Government should review DTA legislation by spreading the benefits of the tax credit over a longer period of time, "the risk is very low“. Mps will be able to immediately register dta for 1,5 billion, he recalls. “When we talk about synergies, there may be doubts about the reduction in revenues or thinking that it will take more time for the synergies on costs and funding, but the Dtas are cash from day one”. It is thanks to the dtas that the bank will be able to offer a 100% payout thanks to a capital generation higher than the net profit.
