A plan "synonymous with very strong change". Discontinuity with the past is the aspect from which Alessandro Profumo, president of Bmps, starts to present the new three-year plan launched yesterday by the board of directors of the Sienese bank. Which will lead to a different bank structure and which has innovative characteristics compared to the past. A path that is not only necessary for Mps, in Profumo's words, but “for the entire banking system. Adding that "there is a need to find a balance in the budget structure".
According to Profumo, the current economic and financial conditions “require a profound way of doing banking. For the first time we present a plan with decreasing revenues but leading to an improvement in profitability. All this will lead us to have a different structure of the bank and the income statement. This plan makes it possible to reset the funding position with the ECB and the repayment of the T-bonds. It will also lead to having a bank, MPS, positioned to optimize customer relations". The MPS share rose by 1,89% to 0,1943% after an intraday high of 0,1988 euros.
THE NEW TREMONTI BOND WILL BE REFUNDED WITHIN 2015
The plan that aims at capital strengthening also through the subscription of new government bonds comparable to the Tremonti bonds, however, plans to repay most of the public aid over the three-year period. The hypothesis for 2015 is that 475 million of Tremonti bonds will remain in Monte out of 3,4 billion. Details on the cost and conditions of the T-bonds will be known in the coming days. The interest rate on the new T-Bonds could be higher than the existing one, explained CEO Fabrizio Viola during the presentation of the 2012-2015 business plan to the financial community. According to analysts, the Tremonti Bonds will collect around 300-350 million in profits a year. The path of capital strengthening will necessarily imply, as already specified in the plan, one prudent dividend distribution policy.
Why weren't i used? cocobond? “We believe we have implemented everything we could as far as the bank was entitled – said Viola – we have assessed the impossibility to date of going down the road of placing the Coco Bonds for market reasons and also the indefiniteness of certain regulatory aspects.
NOT SHORT-TERM CAPITAL INCREASE
Among the measures envisaged for the strengthening of capital there is also a proxy for a capital increase of one billion euro to be offered excluding the pre-emption right within a 5-year term. “The capital increase with exclusion of the option right was done because a possible transfer of this right would have created pressure on the title – explained Profumo – which would jeopardize the implementation of the plan itself”. The assembly for the proxy is scheduled for the autumn but, Profumo said on the sidelines of the presentation, the usage forecast is not short-term but in the horizon of the plan. “We absolutely don't have any ideas,” Profumo replied when asked if there were already any ideas on a new partner who could subscribe to the increase.
ASSET DISPOSAL CONTINUES
Despite the Tremonti bonds, asset disposals will continue beyond the end of June, the deadline to meet EBA requests. And this on the basis of contacts established some time ago with some subjects and the need, in the words of the CEO, to improve the liquidity and capital profile also through divestitures (yesterday the board of directors also gave the green light to the sale of Biverbanca). Contacts for the sale of the consumer company are already advanced. The capital increase and the divestments will in fact serve for the repayment of the Tremonti bonds.
A demanding plan, commented Viola, which however "we want and must achieve" and which allows the bank to remain independent. For Profumo "the plan has a feature of feasibility and credibility due to the relative pessimism due to the economic scenario and allows for a comfortable capitalization also in view of Basel 3".
THE REACTIONS OF THE FOUNDATION, ANALYST AND TRADE UNIONS
MPS Foundation, the majority shareholder with 36,5%, expressed full appreciation and sharing of the business plan which made choices “consistent with the strategic guidelines” indicated by the Foundation itself in the shareholders' meeting of last April 27, from capital consolidation to the return to profits and dividends. It was Mancini who asked for a reduction in costs and a "strong focus on the bank's core business". The Foundation also agrees with the choice of the Tremonti bonds "postponing the capital increase to a future perspective, pending the emergence of more favorable market conditions". They analysts? Initial reactions speak of a plan that "seems credible". Kepler considers it quite “aggressive although most of the profitability is related to a severe cost cutting never experienced in Italy before”.
The unions, already on a war footing in view of personnel cuts and cost reductions, are tough, rejecting the plan, denouncing "the absolute incapacity of the top management and the total lack of ideas at the industrial project level". Thus the RSA coordination of Bmps who adds: "after six months of chatter and absolute immobility, the company reveals "its only objective: the questioning of jobs and the drastic worsening of personnel conditions". According to the unions, the plan "has no chance of relaunching the bank but rather decrees the downsizing of the group's strategy". The RSA of Monte dei Paschi will meet the bank's top management tonight to whom "we will confirm our absolute opposition to the project and the determination of the workers to oppose this plan by any means".
Today Bouquet in the presentation he instead spoke of “a plan that has very strong social sustainability”. The president of Mps explained: “there is talk of repositioning the bank with a much greater stable revenue generation capacity than it has had up to now. It is a plan that has a very strong effort to allow us to protect the performance of revenues from services which partially offset the inevitable reduction that we will have in revenues from net interest income because the bank has too high a leverage effect. So it's a plan with a very strong commercial effort that allows you to manage a repositioning of the bank in a way that is socially acceptable. We are not talking about redundancies, we are talking about a reorganization of our production structure which will allow for a reduction in the workforce exclusively by counting on the departures of people who will retire having accrued the rights; the normal outgoings we have over a three year period, such as transfers. We have an outsourcing of back office activities but protecting job positions and we have divestitures. So it is a plan that has very strong social sustainability".
