Intesa Sanpaolo’s victorious battle for rival UBI has sent shockwaves through Italy’s fragile banking sector as financiers try and work out who will be next in an industry ripe for consolidation, Reuters reported. The unsolicited bid, Europe’s largest banking deal in a decade, has set the stage for further mergers in the fragmented sector as pandemic-induced losses mount, adding to lenders’ existing struggles with negative interest rates and the need to adapt to a fast-changing digital world.
UniCredit has sold non-performing loans worth €1.54bn in an effort to reduce its exposure to bad debt, as banks come under pressure to clean up their balance sheets in anticipation of a wave of defaults related to Covid-19, the Financial Times reported. Italy’s largest lender by assets said that the two portfolios of non-performing unsecured loans — made to small and medium-sized enterprises and worth €702m and €840m — had been bought by digital bank illimity, Banca Ifis and a securitisation vehicle managed by digital bank Guber Banca and Barclays.
Atlantia, the infrastructure group controlled by the billionaire Benetton family, has agreed to sell a majority stake in its toll road business following a bitter dispute with the Italian government over the fatal collapse of a Genoa bridge in 2018, the Financial Times reported. Under the terms of the deal, Atlantia will sell at least 51 per cent of its toll road business, Autostrade per l’Italia, to state-owned Italian lender Cassa Depositi e Prestiti, the government said on Wednesday.
The chief executive of UBI Banca has vowed to be a buyer rather than a seller in the consolidation of Italy’s fragmented banking sector, dismissing a takeover bid by the country’s largest bank Intesa Sanpaolo as anti-competitive, the Financial Times reported. “I understand that in certain countries it is desirable that large banks buy out smaller peers but . . . while Spain, France or the UK have several large banks, Italy only has one,” Victor Massiah told the Financial Times.
Italian banks have the highest portion of loans to industries suffering the most from the coronavirus pandemic, making their capital buffers more vulnerable to any deterioration in asset quality, Bloomberg News reported. Credito Emiliano SpA, Banco BPM SpA, BPER Banca SpA and Unione di Banche Italiane SpA top the list of more than 100 European banks exposed to industries badly hurt by the crisis, according to a research conducted by Eric Dor, director of economic studies at the IESEG School of Management in Lille, France. “Loans to depressed sectors by several Italian banks are more than fo
Italy plans to dramatically expand public investment, focusing on boosting growth rather than reining in debt as the government plots its way out of the worst recession in a century, Bloomberg News reported. State investment will rise above 3 percent of gross domestic product over the next four years from 2.3 percent in 2019, according to an overnight statement from Giuseppe Conte’s cabinet following a minsters’ meeting.
The Italian government approved a package of measures today aimed at cutting the complicated red tape that has long been blamed for crimping growth in the euro zone’s third-largest economy, Reuters reported. The “simplification decree,” approved after weeks of fraught political negotiation, has been touted by Prime Minister Giuseppe Conte as “the mother of all reforms” to help relaunch an economy brought to its knees by the coronavirus. It was approved in a preliminary version at a late night cabinet meeting, leaving some final details still to be hammered out.
Some hedge funds that bet against a series of Greek and Italian companies are nursing losses after the European Union’s breakthrough plan for a 750 billion euro (£673 billion) recovery fund sent stock markets surging across southern Europe, Reuters reported. The funds, which include Citadel, Marshall Wace and AKO Capital, still hold short positions on companies such as Italy’s Banco BPM and Greece’s Piraeus Bank ahead of a June 18-19 EU summit to debate the recovery fund, aimed at helping European economies recover from the impact of the coronavirus pandemic.
Eurobank has moved ahead of Greek peers in the drive to cut bad loan volumes after completing a deal with Italian debt recovery firm doValue, and is now focused on boosting lending, its chief executive told Reuters on Tuesday. Greek banks have been making headway in their bid to sell, write off or restructure billions of euros of soured loans accumulated during the last financial crisis, Reuters reported. The high level of non-performing exposures (NPEs) - about 40% of their loanbooks in March - constrains their ability to finance the country’s economic recovery.
EasyJet will not fly to Italy if Rome prolongs social distancing rules on planes beyond June 15, the budget airline’s chief executive said in a newspaper interview, Reuters reported. “It would be impossible for companies to operate with only a third of the seats sold,” Lundgren was quoted as saying by Corriere della Sera on Thursday.