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Sale of four rescued banks gets under way

by Marco Ferrando

The sale of the “rescued” quartet of banks saved in a €3.6 billion “bail in” last month officially started yesterday morning, with the meeting of the steering committee, which brings together directors and consultants of what is in effect a virtual holding company controlling Carife, Banca Marche, Popolare Etruria and CariChieti.

According to Il Sole 24 Ore-Italy24 sources, the two advisors for the sale - Oliver Wyman and Societe Generale - were involved in the meeting for the first time. The process must move quickly.

The European Commission has set an unofficial deadline of mid-2016, and -- although the issue is under negotiation with the government -- the Bank of Italy and the four boards of the banks all led by former UniCredit executive Roberto Nicastro intend to complete the sale before then.

After all, the assets should have a strong appeal given the banks’ widespread presence of economically significant areas and especially the write down of their non-performing loans from €8.5 billion to €1.5 billion, according to people familiar with what was discussed at yesterday’s meeting.

This latter factor, in particular, can attract the attention of foreign investors (traditionally cautious towards Italian banks for fear of having to inject more capital than expected) but also other Italian lenders, since by buying a competitor with zero NPLs they could in fact spread their own portfolio of bad loans over a wider asset base.

And this brings another question: single sale or as a group?

This particular knot, according to what can be gleaned from the advisors, will be untied between late January and early February.

In other words after a pre-survey of the market: in fact, all things being equal the sellers are likely to discard the option resulting in the smallest number of suitors.

Interested buyers are, as discussed during another informal meeting which was held on Monday evening: the private equity funds, from Centerbridge (which has Arca SGR on its radar screen) to Apollo (still digesting its purchase Carige Assicurazioni and struggling to assemble a banking and insurance group in Europe), and Italy’s “popolari,”  with some of them - including BPER - which would see the purchase as a first step for more ambitious deals.

In the background, foreign banks: the interest of those who already have a subsidiary in Italy is hotter, while -- according to market rumors -- interest is growing at a bank that has been studying for months a plan to enter our domestic market.

Alongside the pre-survey, the sellers are carrying out other preliminary steps.

First comes the sale of the NPLs to the “bad bank,” expected in January, then the closing of the balance sheets (an unusual year lasting only 39 days), then the pricing in an auction, although in practice it will not resemble a real auction.

As noted, the only thing known right now about the four banks is their capital, reconstituted in late November with the fresh resources injected by other banks: this ranges from €1.04 billion for Banca Marche to €141 million for CariChieti. For the moment it must be considered the minimum price at which they can be sold in order to repay loans granted by Intesa Sanpaolo, UniCredit and Ubi.