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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FINANCIALS
Italian press talking up banking consolidation (again); would be credit positive for target (smaller) Italians but larger banks (and their shareholders) appear unwilling, we feel.
- Il Foglio reported that investment banks are looking at feasibility studies on consolidations amongst Italian banks. This has been a long-running story but domestic politics (and some low-quality loan books) have generally stymied recent activity. In-market consolidation is one of the few M&A strategies that have tended to add value to banks over time – politics notwithstanding.
- The Italian state’s lock-up on its Monte Paschi stake (BMPS IM) expired on 21-Feb and press immediately started speculating about sales after the CEO stated consolidation as “inevitable”. BPER put a statement out denying interest.
- MPS’s curve continues to trade wider of its (better-rated) peers (see graphic) and looks to be tightening further this morning. The Italian majors have long been seen as the better way for the Italian state to exit but neither have been attracted yet. Unicredit (UCG IM) and Intesa (ISP IM) both trade at mid-single digit PEs and discounts to tangible book value, implying their shareholders would be unhappy to pay up for buying other banks.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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