Italy’s biggest bank could pocket €3.5bn from BoI’s stake sale
February 03, 2014 - 6:46:47 am
MILAN: Italian banks Intesa Sanpaolo and UniCredit could cash in up to ¤3.5bn combined from the sale of part of their revalued stakes in the central bank, according to analyst calculations.
The Italian parliament on Wednesday gave final approval to a decree hiking the value of Bank of Italy’s (BoI) share capital to ¤7.5bn from ¤156,000 previously, which had not been changed since the 1930s.
The decree also set a three percent ceiling on the stake that the central bank’s shareholders — mostly Italian banks — can own.
That means that Intesa and UniCredit, currently the central bank’s largest shareholders with stakes of 42 percent and 22 percent respectively, will have to sell the bulk of their stakes on the market or to the central bank — which can buy them back for a limited period of time.
The decree says the banks have three years to comply with the new rules.
Should Intesa Sanpaolo sell a 39 percent stake, it could cash in up to ¤2.3bn before tax according to analysts’ calculations based on the new share capital of the Bank of Italy.
UniCredit could pocket a gross capital gain of around ¤1.15bn from the disposal of its 19 percent stake in the central bank.
The only other lender with a stake in the central bank exceeding three percent is Carige which stands to reap a capital gain of ¤73m if it sold part of its holding to comply with the decree.
The capital gains from the sale would be used to boost the banks’ core capital, which in the case of UniCredit and Intesa already meets stringent Basel III regulations.
The boost for the common equity tier 1 would not in any case count in a health check of European lenders being conducted by the European Central Bank, which will use the banks’ balance sheets at the end of 2013 for its assessment.
“The ownership limit will benefit only Intesa Sanpaolo and UniCredit,” said Fabrizio Bernardi, analyst at Fidentiis Equities.
“It will not help, however, Monte dei Paschi di Siena and Banca Carige, which are desperate for capital,” he added.
Monte dei Paschi has to raise ¤3bn later this year to pay back state aid, while Carige needs to boost its capital by ¤800m.
The new law will enable the commercial banks to improve their balance sheets from 2015, and also help public finances thanks to the taxation of the capital gain the banks will register.
Italy will pocket ¤900m between 2014 and 2016 from the taxation of revalued stakes in the central bank.