Monte dei Paschi di Siena has until next Thursday to raise private capital. The government, which has already scheduled a meeting for Thursday December 22, could be able to open a public parachute before holiday break. Yesterday, as Consob was preparing to clear the prospectus of the recapitalization and the bond-to-equity swap (the ok came around midnight), the board of the bank approved the €5 billion capital increase.
An Italian judge approved on Wednesday a settlement agreement between Credit Suisse AG and the country’s authorities under which the Swiss bank will pay 109.5 million euros to end a tax probe, Reuters reported.
Milan prosecutors have been investigating since 2014 an alleged fraudulent system used by the bank to transfer up to 14 billion euros to offshore accounts, mainly through the use of insurance policies. Some 13,000 clients are allegedly involved and remain under investigation.
Italy’s biggest bank, UniCredit, announced plans on Tuesday to slash 14,000 jobs and raise billions of euros in fresh capital as fears of a banking and political crisis grip the country.
The bank, one of the worst performers in European bank stress tests, confirmed it would need to seek 13 billion euros ($13.8 bn) in fresh capital from investors despite political instability in Italy and the nation’s third-largest bank scrambling to avoid a government-led rescue.
The bank plans to use the record rights issue to help remove almost €18bn of bad debt from its balance sheet and boost profitability.
UniCredit also plans to close about a quarter of its 3,800 branches.
The Eurogroup will have to wait and see what Italy’s next political steps are, what its government will do and what its president decides, President of the Eurogroup Jeroen Dijsselbloem said Monday.
Attending a Eurogroup ministers’ meeting in Brussels, Dijsselbloem’s remarks came after Italian Prime Minister Matteo Renzi said he would resign after losing Sunday’s constitutional referendum.
Italian Prime Minister Matteo Renzi vowed to resign after suffering a crushing defeat on Sunday in a referendum on constitutional reform, tipping the euro zone’s third-largest economy into political turmoil.
In a late-night news conference, he said he took responsibility for the outcome, and said the No camp must now make clear proposals.
With most ballots counted, the No vote leads with 60% against 40% for Yes.
Italy will also get information on bank accounts abroad next year, thanks to agreements with Switzerland and Liechtenstein. The deal allows to the Italian tax authorities not to wait that taxpayers, with cash and assets deposited abroad, regularize their position. In order to hunt down the cash, the tax agency is preparing collective data requests.
It means that the Italian authorities will ask and get the data of the Italian customers who have opened a foreign bank account. As pointed out by the Italian newspaper Il Sole 24 Ore, authorities "won’t stop to Switzerland only, due to the fact that the agreements signed in 2015 will offer new opportunities."
The new business plan, "signed" by Marco Morelli and approved yesterday by the Board of Directors of MPS, expected net profit of 1.1 billion Euros to 2019. The board of directors scheduled November 24 an extraordinary shareholders’ meeting to approve the capital increase up to a maximum of € 5 billion.
The new business plan then tip a net profit of €1,1 billion in 2019. And at that time also, the MPS plan foresees revenues of 4.5 billion, operating costs to $ 2.46 billion and an operating profit of €1,5 billion. The operating model, the bank explains in a note, it will be renovated and will point to a strong focus on efficiency, with a cost / income ratio of 55% in 2019 and allocated to the commercial activities of a higher proportion of employees from the current 62% to 71%.
The Hungarian financier George Soros would be interested in joining MPS, as reported by the Italian newspaper Il Sole 24 Ore. Besides Soros, also Qatar and US funds would be ready for subscrition of the capital, which in any case should be less than 5 billion initially indicated. The plan and the bank accounts will be approved today by the board and disclosed to the financial community tomorrow.
The scheme, imagined by the MPS financial advisers would be to focus on the anchor investor that could cover the supply in the market with high amounts: some Qatari funds would be interested in investing €1.5 billion to €2.0 billion, while, the newspaper wrote just yesterday, another billion could come from two US large institutional investors: they would be, according to rumors in financial circles, George Soros and one of the kings of the US hedge fund, John Paulson.
