The EU authorization to the bad bank for non-performing loans makes Mps fly

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The Commissioner for Competition explained that she had “given comfort to the Italian authorities” on the creation of onebad bank in which to bring together a part of the NPL of the Sienese institute. “There are contacts in progress, this is not a public aid operation and it was decided before the coronavirus crisis: it is up to each State to decide whether to notify or not, so far Italy has not made a notification”

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You earn double-digit Mps shares after the EU clearance, in fact, to the bad bank for the sale of the NPLs. After press reports, the Competition Commissioner, Margrethe Vestager, explained that he “gave comfort to the Italian authorities” on the creation of one bad bank in which a part of Mps’ impaired loans is to be channeled. The EU Commission, therefore, has no problem with this solution: “There are contacts in progress, as far as we can see it is not a (public) aid operation and it was decided before the coronavirus crisis: it is up to each State decide whether to notify or not, so far Italy has not made a notification. ” In the meantime, the market believes in the 10 billion euro non-performing loan project and is rewarding the title.

The analysts’ judgment on the operation
The deal, explains Equita, would allow “according to our calculations to reduce the Npe ratio of Mps from 13.2%” recorded at the end of the first quarter “to 2.1%” And although the details of the transaction are not known , it is possible to hypothesize that “the transfer price of the transaction may be close to values
market “.

On the capital requirements front, analysts recall that, following the EU’s approval of measures to support the economy in the current Covid-19 emergency, the government could actually recapitalize by 31 December 2020 the bank without resorting to the so-called ‘burden sharing’ of shareholders or subordinated creditors “bringing Cet1 back to a level well above buffers”. The operation “would make Mps more desirable from an M&A perspective, favoring an exit strategy of the MEF, even if the possibility that the government may aim at full control to complete the exit in longer times is not to be excluded “.

(Il Sole 24 Ore Radiocor)



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