Mps, a 1.8 billion bomb on the bank: what can happen

The Montepaschi of Siena closes the first six months of the year in 86.5% drop compared to 2021, with a profit of 27 million and is preparing for the capital increase of 2.5 billion euros by expanding the underwriting syndicate, with the meeting called for 15 September. The CEO Luigi Lovaglio, by teleconference with analysts, he assures us that we are proceeding «at full speed in the execution of the piano. We are convinced ”, he adds,“ that it will be impossible to stop our determination, we will achieve all the objectives ”. However, optimism is not enough for the market, with the title plunged to Business Square, suspended from trading, and then ended up falling by 6.74% to 0.415 euros. To weigh on the half-year profit – with revenues of 1.5 billion down by 2.5% – explains the Sienese institute, “are some registered post offices in the first half of 2021, including the greater contribution from the sale of securities as well as the improvement in coverage of impaired loans which took place during the first two quarters of 2022 ».

NEW GRAINS – But to sink the title on the stock market, more than the ballasted revenues were the out-of-court requests for 1.8 billion, “Received from a consultancy firm on behalf of institutional investors in relation to the known events relating to financial information”. It is, Lovaglio observes, of these a “serial” increase and “we asked our lawyers for an opinion and, according to them, requests are extremely dubious almost as to not justify provisions by the bank”. A first request for damages, for an amount of one billion, was received in the second half of the year. To this was added a second, delivered to Rocca Salimbeni at the beginning of August, with the request for 800 million euros. “According to the bank’s legal advisors,” reads a note released by the Sienese institute, “the conditions for making any damage estimate do not exist, nevertheless the bank has made provisions”.

ALMOST 30 BILLION – What is the outcome of yet another controversy, which emerged only yesterday, is likely to rise to almost 30 billion euros the bill paid by the shareholders and also by the contributions, for the management of Montepaschi from 2008 to today. A sequence of capital increases, bond issues, credit lines, culminating in the extraordinary precautionary recapitalization of € 5.7 billion with which the Ministry of Economy entered the bank’s capital and now holds 64.23 %. And it is worth noting that of the 2.5 billion euro of the recapitalization scheduled for September, 900 million are already committed to aspire to the 3,500 voluntary early retirements – up to seven years in which an agreement was reached with the unions on Thursday. The focus is now on a capital increase which will see the underwriting consortium as protagonist, which has risen to 8 institutions since yesterday: “Banco Santander, Barclays Bank Ireland, Société Générale and Stifel Europe Bank, have joined forces with BofA Securities Europe, Citigroup, Credit Suisse and Mediobanca »And before the start of the operation, the consortium could be extended to other financial institutions. Just to avoid that, in the event that the unopted is substantial, the State is forced to increase its shareholding in the capital. Pure on this news, the stock exchange did not celebrate.

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Mps, a 1.8 billion bomb on the bank: what can happen

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