A tough day on the stock exchange for Montepaschi, which in the middle of the morning loses more than three points, among the worst stocks on the Ftse Mib. Yesterday the Bank communicated the data relating to the first quarter of 2012, which closed with net profits of €54,5 million, down 61% on the €140,3 million recorded in the same period of 2011. Revenues amounted to 1,503 billion euros (+1,4% on an annual basis) while the interest margin remained stable at 893,5 million. Direct funding fell by 6,1% to 137,3 billion while indirect funding increased by 4,5% to 140,6 billion. Core Tier 1 has reached 10,5%.
By June, Mps must cover the 3,267 billion capital buffer requested by the EBA for its exposure of around 25 billion in BTPs. For this reason, it has a three-point plan that includes capital management measures, RWA optimization and the disposal of assets.
“Most of the actions included in the plan, referring to the first two points, have already been completed. This has so far resulted in benefits that cover slightly more than half of the above shortfall,” the bank says.
"I don't expect help from the market, so we will draw up a plan based on management actions," explained the CEO of MPS, Fabrizio Viola, in a conference call. Viola reiterated the three cornerstones of the business plan, which will be "very operational": capital, liquidity and sustainable profitability.
Furthermore, within the framework of the completion of the Eba plan, the ad confirms that it has considered the possible use of a Co.Co bond (Convertible Contingent capital): “alternative capital strengthening initiatives are being studied which also include an assessment of the possible feasibility of issuing a Co.Co. It is a project that we are also studying with the effective collaboration of the supervisory bodies", also because "it would be the first time that an instrument of this type has been placed on the market".
From the downgrade of Moody's, Viola expects the "main effects" especially "on liquidity", but they should be "quite contained", since already in 2011 the previous downgrades had largely affected "the profile of profitability and today we could speak of a billion, a billion and a half".
Finally, the judicial investigation relating to the Antonventa case. “At the moment, based on the information I have available – Viola explained -, I do not believe that the relevant element is a financial risk for the bank. Obviously we are at the beginning and therefore we are waiting to have more information”. In any case “these questions do not call into question the solidity or the ability of the bank to stay effectively on the market. And indeed, as far as we are concerned, they are an incentive to move forward even faster".
