We are at a turning point for the Veneto banks. The willingness expressed by Intesa Sanpaolo changes the cards on the table and Europe's first go-ahead for liquidation and bail-in-free bail-out paves the way for a solution to the case.
VENETIAN BANKS: NO RISK FOR THOSE WHO HAVE A LOAN AND FOR CURRENT HOLDERS
If the "healthy" part of the two banks were sold to Intesa Sanpaolo and the non-performing loans merged into a bad bank, those who have applied for a loan from Popolare di Vicenza or Veneto Banca would risk nothing since the debt will simply be transferred to the acquiring bank. No risk even for account holders who will not be involved in the vicissitudes of the two institutions.
RISKS FOR SHAREHOLDERS
The situation regarding shareholders and bondholders is very different. In the event that the intentions are confirmed, i.e. if the non-performing loans are sold to a state-run bad bank, the losses could be covered through a shareholders' elimination. The shares in the hands of the shareholders after the recent transformation of the two Popolari into Spas could no longer be worth anything, while as far as the previous shares are concerned, as it will be recalled, during the last few weeks most of the old shareholders adhered to an agreement with the institutes receive at least partial reimbursement of the capital account losses incurred on the occasion of the metamorphosis into a Spa.
RISKS FOR BONDHOLDERS
If, as mentioned above, the senior bonds will not face any repercussions, the holders of the subordinated bonds, and in particular the investors holding junior bonds, could instead be involved in the transaction, thus facing further losses. At this juncture, according to some leaks published by Il Sole 24 Ore "it is probable, according to what is filtered by the Treasury, that for this type of investor who has suffered a fraudulent sale ("misselling"), a form of reimbursement on the MPS model will be triggered" .
