What impact will the ongoing war on UBI Banca have on the Italian banking sector?


That there is an ongoing war on UBI Banca between Unicredit and Intesa Sanpaolo is now well known. The ending of the OPS launched by the bank led by Messina, in fact, will have significant consequences on the structure of the Italian banking sector.

Without returning to the hostility of a part of UBI Banca to the public exchange offer presented by Intesa Sanpaolo, the Authority responsible for competition and the market is now dealing directly with the matter. So much so that the third actor, Unicredit, was also called on an audition.

The terms of the matter are well summarized as written by the Guarantor Authority

The presence of two larger groups belonging to Intesa Sanpaolo and Unicredit emerges in Italy, which operate throughout the national territory (…) and which are able to play a significant role also at supranational level, and numerous medium-sized groups dimensions, (…) including the group headed by Ubi, which is present in 18 regions out of 20.

This general context would be significantly modified as a result of this transaction mainly in two respects. On the one hand, it would be deprived of the presence of a medium-sized operator such as Ubi, which in a not remote future could have acted as an aggregation pole, constituting a third large banking group that would have joined the two major banks, Intesa and Unicredit. On the other hand, the substantial symmetry between the first two national banking groups would be overcome as a result of the transaction in question, with the significant growth of Intesa.

As a possible weapon in the ongoing war on UBI, someone has even speculated that Unicredit may purchase 10% of the capital of the bank led by Messiah. At the moment, however, there are no confirmations.

It is therefore clear how the Authority’s decision can have a significant impact on the Italian banking sector.

Graphical and forecast analysis on UBI Banca stock

UBI Banca (MIL: UBI) closed the session on 29 May at € 2.541, down 0.55% on the previous session.

The current weekly trend on the stock is very uncertain with the prices that have crystallized in the € 2.5 area since mid-March. This too is an effect of the ongoing war on UBI Banca, with investors who don’t know what to do given that uncertainty reigns supreme.

At the moment, therefore, the best strategy could be to stay away from the title.

For thrill seekers, but always keeping risk management under control, you could aim for the upside. In this case the goals are very ambitious. The 1st price target, in fact, is in the € 3.9 area for a rise of over 50%. For the subsequent objectives shown in the figure, then, we are talking about potential triple-digit increases.

It should be borne in mind, however, that descents to historic lows in the area may be possible € 1,744.

To reduce exposure to risk, a stop could be applied in the case of weekly closings of less than € 2.116.

ubi bank

UBI Banca: bullish projection in progress on the monthly time frame. The blue line represents the running bisector levels; the red line the levels of The New Law of Vibration

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