No catastrophe on the markets after the victory of the No in the constitutional referendum, but the alert remains high. Eyes are focused above all on the banks, the same for which the Financial Times, on the eve of the consultation, announced pain with the risk of bankruptcy for 8 of them.
After an opening in deep red and an attempt to recover, the banking sector on Piazza Affari is prey to strong volatility fueled by political vicissitudes. And so it risks being throughout the month of December, days in which the fate of many institutions (listed and unlisted) will be decided and in which political-institutional instability could represent yet another obstacle on an already very impervious road.
The most difficult game will undoubtedly be that of Monte dei Paschi which, having concluded the conversion of the bonds (which should be worth one billion) is planning to start the capital increase. The high volatility and uncertainties present on the markets after the victory of the No could further complicate an already high-risk operation. The bank's top management met in Milan to try to take stock and understand how to avoid compromising the possibilities of intervention by sovereign wealth funds, yes, willing to invest, but on condition that they can glimpse a stable financial and institutional horizon.
In the event that the private recapitalization of MPS goes badly, the hypothesis of failure having been ruled out a priori due to its evident systemic risks, the only alternative to follow is some form of nationalization which would, however, open up bitter political controversies led by the Movement 5 stars.
Also because in this case there is a risk of a paradox. Because public intervention would pave the way for the so-called Burden Sharing, the system according to which shareholders and subordinated creditors must shoulder part of the costs necessary to restore the bank in crisis by reducing the nominal value of their securities or converting them into capital . To do this, a strong government will be needed which, following what happened, will hardly arrive in the coming months.
Another market operation that risks suffering the consequences of political and financial uncertainty is the capital increase of Unicredit, whose board will meet on Monday 12 December to prepare a new strategic plan aimed at raising 20 billion euros. Based on what is expected and hoped for, the recapitalization should bring in between 10 and 13 billion euros, while the rest should come from the sale of subsidiaries such as Banca Pekao and Pioneer.
As Repubblica underlines, "even here the vote weighs", especially for the reflections on the future of Pioneer, on which it has been open since yesterday an exclusive negotiation with Amundi.
In any case, the increase of the bank led by Jean Pierre Mustier should arrive in February 2017 and in view of this appointment the CEO himself tries to put out the fire by stating that "the outcome of the referendum does not change the plans of the institute".
Not to be underestimated either the Good Banks node: Ubi Banca's proposal relating to three of the four banks, namely Banca Marche, Banca Etruria and CariChieti, requires not only the European go-ahead but also such stability as to allow the Bergamo-based institution to have the margins to recover the investment. The acquisition plan presented by Victor Massiah's bank envisages, in addition to the intervention of the Interbank Fund and Atlante, also a capital increase that the bank will have to carry out for approximately one billion. But taking into consideration the current market and political difficulties, gambling may not pay off, especially considering that the stock costs about one-fifth of your net worth.
In the not impossible case in which UBI decides to back out, the three banks would face bankruptcy unless the Interbank Fund, which has already paid out a lot of money, decides to pass out and intervene again.
Within the chaos that distinguishes the banking sector, theand Popular. After the order of the Council of State blocking the reform approved in 2015, it will be up to the Consulta to intervene in the case and find a solution to the stop imposed on the Bank of Italy circular which provided for the possibility of suspending the redemption of the shares on which the right of withdrawal was exercised with reference to the transformation into spa.
The problem is that in this case time is short and a decree is needed within a few days to postpone the meetings of the banks that have yet to approve the transformation into a joint stock company, at least until the Constitutional Court decides what to do. The Popolare di Bari assembly is scheduled for 11 December, while that of the Popolare di Sondrio has been called for 17 and if someone doesn't resolve the situation, there is a risk of chaos. But with a political crisis that has just opened, a Government that has resigned and a Parliament blocked, it is not known who should issue the decree containing the postponement, considering such a tight deadline because on 27 December next the Popolari with assets exceeding 8 billion risk losing the banking license in the event of failure to transform it into a joint stock company. La Popolare di Milano and Banco Popolare, for their part, have already held the necessary meetings, within which it was decided to entrust the management of repayments to the new bank. The problem is that, in the absence of certain legislation on the right and methods of withdrawal, there is the risk of a shower of appeals. It should be emphasized that the combined effect of the decision of the Consulta and the constitutional referendum had strong repercussions on the shares of the two Popolari which recorded losses of more than 7% on Piazza Affari
Last but not least the issue that the banking sector will have to face is that of restructuring of Popolare di Vicenza and Veneto Banca, currently engaged in negotiations aimed at defining the merger plan which should arrive before Christmas. In this case, each of the two institutions will have to extract from its balance sheet about two billion bad loans that risk being left without buyers due to the market turmoil. The problems relating to the possible new intervention of the Atlante Fund and the amount of redundancies that the marriage could entail also need to be resolved.
Meanwhile Vicenza will have to face a period of adjustment following the resignation of Ad Iorio and the forthcoming arrival of the former Mps Fabrizio Viola.
In short, for the banks the post-referendum is marked by an emergency and time is running out.
