The financial situation of Unicredit at the end of 2016 will not be in line with the european directives: risk, time, interest coupons and dividends. This is what is learned from the registration document filed today in the Consob and by the bank itself and on the upcoming capital increase that the institute is preparing to tackle starting next week. A dossier of 1049 pages to which the Authority of the financial markets, the Italian has given the go-ahead.
In the dossier, in particular, are highlights of the risks to which the institution would face in the event the recapitalization is not completed. One thing is certain: the effect of the time lag between the actions foreseen in the strategic plan, with a negative impact on the numbers of the group, the execution of the capital increase and the transactions of sale of assets, the capital ratios at the end of 2016 will not be in line with the objectives of the Srep. At December 31, 2016, in fact, the Cet1 phase-in will be equal to approximately 8%, tier1 capital ratio of 9% and the Total capital ratio to 11.5%.
In consideration of the above-mentioned non-compliance with the capital requirements, Unicredit will not proceed “until the restoration of the capital requirements are not met, the distribution of dividends and the payment of the coupons of the instruments Additional tier 1 capital”, stressed Gae Aulenti. In the immediate term, this means that “if the capital increase is not subscribed or had subscribed partially, the issuer may not pay the coupon relating to the instruments of Additional tier 1 due in march 2017 and would have limitations on the dividend distribution policy”.
In detail, the implementation of the plan stregico has produced negative effects on the accounting books of the group and the level of capital that the economic overhead of 12.2 billion euro, in good part due to the increase of the degree of coverage on the loan portfolio subject to transfer in the framework of the project “Up” and loans the object of the project “Porto”.
The project Up, as pointed out by the institute on 13 December, provides a de-risking, in two phases, to be completed by the end of the plan 2016-2019, of 17.7 billion euros of gross loans defaulted by a portfolio of securitized loans for which the bank will sell to investors a share homogeneous equal to at least 20% in the first phase in 2017. Instead, the Port project aims to improve the quality of the assets with maneuvers that have led to value adjustments on receivables, in the last quarter of 2016, for a total of about 8.1 billion.
a negative Impact also on the front of the supply. The sale of Pioneer and the investment in Bank Pekao, considering only the economic components recurrent, it will cause a contraction on a pro-forma for the first nine months of 2016 related to the intermediation margin and operating income equal, respectively, to 1.86 billion and 948 million.
For the experts of Banca Imi, taking into account the provisions extra, the fourth quarter of 2016 is expected to close with a loss of 10,35 billion. However, “despite the substantial hoverhang on the action, we retain our positive vision”, concluded the analysts, confirmed the ratings add and the price target to 30 euros.
In the registration document, also, we read how, in the framework of the Srep 2016, the european central Bank has highlighted a number of areas of weakness as the credit risk, in particular the high level of non-performing exposures, the liquidity risk, the risk connected to operations in Russia and Turkey, and the persistence of a level of profitability that is weak.
Therefore, within the next 28 February, Unicredit shall submit to the Ecb a “strategy of non-performing loans, supported by an operational plan to deal with the issue of the high level of non-performing loans”. Currently, Unicredit is subject to the four on-site inspections by the central Institute, and is waiting to receive the results of the audit by the Ecb relative to the market risk.
This afternoon a new board of directors of Gae Aulenti. The meeting will be used to develop the final details of the strengthening of the balance sheet on which it rests, the strategic plan set by the chief executive officer, Jean Pierre Mustier. According to press rumors leaked over the weekend, the fact rather unusual, that the capital increase started before approval of the accounts for the last financial year could be the reason for the meeting today: in the statement of the increase could be, in fact, have to enter some digits of the results in 2016. From here the need to proceed in the day, a preliminary examination of the accounts.
The management would like to launch the recapitalization by eur 13 billion at the beginning of next week, in order to close the transaction by the end of February. Another cda should be summoned for Wednesday next to the approval of the prospectus and the definition of the price range of the capital increase. According to the analysts at Icbpi (rating buy target price to 29 euros), the acceleration of the timing may be due to the desire of management to “take advantage of the good intonation of the markets, avoiding the risk of realizing the operation at most unfavourable conditions of the existing ones”.
The title Unicredit , rose 16.4% in the course of the last three months, today at Piazza Affari cede the 5,16% 26,28 euro.
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