|Bid||4.1540 x 200000|
|Ask||4.1540 x 110000|
|Day's range||4.1250 - 4.3490|
|52-week range||2.8040 - 6.8320|
|Beta (5Y monthly)||1.89|
|PE ratio (TTM)||35.26|
|Earnings date||05 Nov 2020|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||07 May 2020|
|1y target est||11.78|
(Bloomberg Opinion) -- After a decade of scandals and multiple bailouts, Banca Monte dei Paschi di Siena SpA is back in the spotlight. This time, the Italian government is shopping around the 1.5 billion-euro ($1.7 billion) lender ahead of a European Union deadline for Rome to exit the bank next year.Loaded with legal risks that dwarf its market value, any investor will be loathe to buy Monte Paschi with those liabilities — not least in the midst of a pandemic.The risk to Italian taxpayers is that Rome offloads its majority stake in the world’s oldest bank at any cost. A sale to UniCredit SpA, as is being discussed, might solve Italy’s immediate problem of meeting the EU deadline, but the bigger bank would demand strong financial guarantees. A Paschi merger would also make it harder for UniCredit to pursue more compelling deals.It’s no surprise that Italy has restarted talks with UniCredit to sound it out on Monte Paschi. Foreign banks haven’t shown much interest and Intesa Sanpaolo SpA, UniCredit’s main rival, is busy buying UBI, another lender that might have made a good merger partner for Paschi.Equally predictable is that UniCredit is pushing back. The company wants the government to cover any capital shortfall from a potential merger and the legal costs, according to press reports. History isn’t on Rome’s side. In 2017, the state funded Intesa’s purchase of two failing lenders.Why would UniCredit accept anything less this time? Chief Executive Officer Jean Pierre Mustier has focused on returning capital to shareholders after cleaning up his own bank. Strategically, taking over another mid-tier Italian lender, Banco BPM SpA, makes more sense. A BPM deal would reinforce UniCredit’s position in Lombardy, the economic engine of Italy.A merger in Germany, UniCredit’s second-biggest market, would be even more compelling. While cross-border deals remain difficult in Europe, if Germany’s Commerzbank AG were to come up for sale, UniCredit would be better off pursuing that purchase.The reason Mustier is being pressured over Paschi is that other avenues for the ailing lender are much less appealing. A combination with Popolare di Bari, which Italy is in the process of rescuing, wouldn’t return Monte Paschi to private hands.Adding to Rome’s urgency, Monte Paschi is close to selling 8 billion euros of bad loans to another state-owned entity later this year, a key milestone in its rehabilitation. The sale will erode Paschi’s capital, which the European Central Bank wants the lender to strengthen. A merger with a stronger bank would solve that problem.A greater risk is that Monte Paschi loses some of the 10 billion euros of legal claims against it, forcing it to set aside more funds and further eroding capital. The pandemic could also lead to a fresh avalanche of bad loans. Should it need to raise more capital, even with the backing of the state, the costs would be prohibitive and eat into already weak profitability. Analysts expect the bank to make just 76 million euros next year, which could be wiped out by higher interest costs.It’s arguable that Monte Paschi should have been wound down years ago — it was probably insolvent at the time of its last state rescue — but more visibility on the potential legal liabilities would at least strengthen Italy’s negotiating hand. While a return to private ownership could help salvage what’s left of the storied lender, Rome must do everything possible to keep a lid on the taxpayers costs.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Commerzbank's <CBKG.DE> management shake-up continued on Thursday with an announcement that the board member responsible for private clients, Michael Mandel, would leave the German lender. The partly state-owned bank, which has been targeted by activist U.S. private equity fund Cerberus, is trying to regain its footing after the resignations earlier this summer of its chief executive and chairman, and years of setbacks since the financial crisis. The decision to accept the resignation offer from Mandel was made at a meeting of the bank's supervisory board on Thursday.
(Bloomberg) -- European Central Bank chief economist Philip Lane warned that the euro’s appreciation this year has dampened the inflation outlook, using tougher language than President Christine Lagarde and signaling that more monetary stimulus might be needed.Inflation will remain negative for the rest of the year and upward revisions in core price growth because of the economic rebound have been “significantly muted” by the stronger exchange rate, he wrote in a blog post on Friday.“It should be abundantly clear that there is no room for complacency,” he wrote. “The Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves toward its aim in a sustained manner.”His remarks come a day after Lagarde said only that the exchange rate must be monitored for its impact on inflation, prompting economists and investors to question whether the ECB didn’t see the gains as alarming.The ECB repeatedly says it doesn’t target the exchange rate, but a stronger currency weighs on prices by cutting import costs. It also undermines output by making exports less competitive.Bank of France Governor Francois Villeroy de Galhau said in a speech shortly after Lane that the exchange rate “does matter for inflation and monetary policy” and will be monitored.The single currency has jumped more than 10% since March and climbed above $1.20 last week for the first time in two years. It was at $1.1868 at 11:42 a.m. on Friday, up 0.5% on the day.Lane’s concern about the currency don’t appear to be shared by all members of the Governing Council though. They agreed on Thursday that there was no reason to overreact, according to people familiar with the matter.Governing Council member Vitas Vasiliauskas said on Friday that appreciation isn’t especially significant. “We should watch it, but historically it’s not that exceptional,” he told reporters in Vilnius.Policy makers need to walk a fine line in trying to stress they are not targeting the exchange rate, which could bring accusations that they’re inciting a currency war.The ECB left its pandemic bond-buying plan unchanged at 1.35 trillion euros ($1.6 trillion) on Thursday. Economists surveyed before that policy meeting predicted that the program will be increased by about 350 billion euros before the end of the year.“If the euro is going to accelerate faster, then the arguments in favor of boosting stimulus will get even stronger,” said Joerg Kraemer, chief economist at Commerzbank AG, who predicts the purchase program will be boosted around the turn of the year.Euro area bonds rose after Lane’s blog, sending the yields on German and Italian 10-year debt lower by three basis points to minus 0.46% and 0.98% respectively. Money market bets indicate there’s a 50% probability that the ECB will lower the deposit rate 10 basis points in April.Lane signaled that the jury is still out on the ECB’s next steps, noting the elevated uncertainty and downside risks to the economic recovery.“Inflation remains far below the aim and there has been only partial progress in combating the negative impact” of the pandemic, he wrote. “Over the coming months, a richer information set will become available that will help to inform the calibration of monetary policy.”(Updates with comments from Vasiliauskas starting in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.