Positive day for Italian banks. Since the morning, the market has acquired the favorable result of the stress tests, anticipating the results that the European Banking Authority (EBA) and the European Central Bank have published, after closed exchanges. The survey involved 48 European credit institutions (of which 37 supervised by the ECB) which represent 70% of the assets of the Old Continent. The simulations on the financial statements of Intesa Sanpaolo, UniCredit, Ubi Banca and Banco Bpm, the only four major Italian institutions subjected to verification, have, as expected, passed the test of capital ratios. It went less well for German institutions, with Deutsche Bank in the lead.
On the other hand, it was the managing director of Intesa Sanpaolo, Carlo Messina, who was the first to announce that he did not see “problems for his bank in view of the stress tests. We are dedicating ourselves so that the bank can be a solid bank and to manage the savings of Italians, to advise Italians correctly in a phase like this where it is important not to lose the bank". Even the CEO of Ubi Banca Victor Massiah said he was confident about the outcome of the stress tests.
The simulation aims to test the resilience of banks in two scenarios, one baseline and one adverse. The hypotheses concerned the decline in GDP in the three-year period 2018-2020 (in the adverse scenario for Italy a cumulative decline of 2,7% is expected), the increase in the unemployment rate, the reduction in prices in the real estate sector. The stress tests are conducted on the basis of the financial statements at the end of 2017 and therefore do not incorporate the effects of the transactions completed this year, while they will include the effects associated with the introduction of the new IFRS9 accounting standard.
Intesa Sanpaolo, UniCredit, Ubi Banca and Banco Bpm reported capital ratios (Cet1 ratio) above the minimum of 5,5% in the adverse macroeconomic scenario and ample margins of safety in the basic one. The securities of the banks concerned closed the trading day up: Intesa rose by 0,9%, UniCredit by 3,1%, Ubi by 2,5% and Banco Bpm by 3,6%.
Positive news also for Bper Banca (+3,8%) and Mediobanca (+1,2%), which are in the group of six significant institutions on which Frankfurt has conducted "parallel" tests, however taking into account the fact that the and complexity are less.
The other four institutes are Carige, PopSondrio, Iccrea and Credem to which the results will be communicated privately but the test would have been positive for them too. According to rumors, only Carige would have recorded fragility in the adverse scenario, with a Cet1 ratio below 5,5%, which is why the stock fell by 2%. The examination concerns 48 European banks (37 of which are supervised by the ECB) which represent 70% of the assets of the Old Continent. The Ligurian bank, on Frankfurt's diktat, will have to prepare a new capital conservation plan by 30 November to restore the capital requirements, in particular the Total Capital ratio. The board of directors will decide how to move in this direction by November 12th.
In the meantime, the EBA is preparing - as specified in the new guidelines on NPLs - to ask for management strategies for non-performing loans when they exceed 5%, a sign that the pressure, in tandem with that of the ECB, on this 'vulnus' of Italian banks will continue for quite some time yet. However, it is not without significance that the Stock Exchange rewarded Banca Ifis, which is one of the major operators in the non-performing loan market, with a leap of 6,69%.
