Italian Banks Update 2017-06

Veneto Banca and  Banca Popolare di Vicenza:  Italian finance officials and the European Commission are racing to find a solution for two troubled banks in the northern Veneto region that have weighed on the nation’s financial system.


  • The Italian government is considering intervening to prevent struggling lender Veneto Banca from having to repay 86 million euros ($96 million) of
    subordinated bonds due to mature next week (here the article). The move comes as Italy races against the clock to win EU approval for a bail out of Veneto Banca and rival regional bank Banca Popolare di Vicenza, which together need 6.4 billion euros ($7 billion) in new capital while they try to offload bad debts.
  • According italian newspaper La Stampa, since government’s plan of using a precautionary recapitalisation to save the two lenders by using more than 5 billion euros (4.38 billion pounds) of public funds seems  no longer viable, a “segregation option” is beeing considered where branches and assets of the two banks would be hived off into a “good” bank while the non-performing loans would be placed in a “bad” bank (here reuters article describing this option) – La Stampa said it was still not clear who might buy the performing assets of the two Veneto lenders but said talks were most advanced with Italy’s Intesa Sanpaolo

MPS the NPL deal is still the main challenge in the turnaround process: according Reuters Two U.S. private equity funds have quit talks to buy a mountain of bad loans from ailing Italian lender Monte dei Paschi di Siena (BMPS.MI),  dealing a blow to plans to secure a state bailout for the bank. Fortress (FIG.N) and Elliott were negotiating to buy some of the 26 billion euros ($29 billion) in bonds that Monte dei Paschi, Italy’s fourth largest bank and the world’s oldest, must sell to private investors as a condition of the bailout.

Carige approved a no-confidence motion against Chief Executive Officer Guido Bastianini in a move that analysts said may delay the bank’s restructuring plan.The board of the Genoa-based bank held the vote after its top investor, Vittorio Malacalza, said he no longer backed Bastianini, who took the helm in April 2016 after Malacalza removed his predecessor. The process to dispose 938 million euros is still in place  since the bank has said it  has transferred the bad loans to a vehicle that will wrap them in asset backed securities and sell them to investors and that  it will tap a state guarantee scheme dubbed GACS to carry out the securitisation

Banco BPM is also said to o accept 123.136 million euros ($138.12 million) in voluntary repurchase offer launched over retail bonds, issued by Banca Popolare di Milano, Banca di Legnano and Cassa di Risparmio di Alessandria .

Unicredit has sold a 450m NPL portolio to Mediobanca Credit Management subsidiary MB Credit Solutions (here the press release)

Stay tuned on Italian Banks and NPL on #Liberi Di Scegliere via @blastingnews



GLG – Gerson Lehrman Group – Council Member

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About Massimo Famularo

Investment Manager and Blogger Focus on Distressed Assets and Non Performing Loans Interested in Politics, Economics,
This entry was posted in Entering Italian NPL Market, Italian Banks and tagged , . Bookmark the permalink.

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