Montepaschi, accounts ok in the quarter. Lovaglio: we are no longer a problem

MILAN. «Monte dei Paschi is no longer a systemic problem, but should be considered for what it is: an asset of value for the country». A year after sitting in the most uncomfortable banking chair in Italy, Luigi Lovaglio appears satisfied. «I never thought that after just seven months from the launch of the strategic plan I would find myself here presenting the results of a quarter with a net profit of 156 million, a ratio between costs and revenues of 60% (from 72% in the third quarter, ed) and a Cet1 of 15.6%». In short, according to his CEO, Siena is “at a turning point”. 2022 still closes with a loss of 205 million (against profits of 310 million last year), but it is the effect of the costs of 925 million euros incurred one-off for staff redundancies and financed with the capital increase from 2.5 billion. Net of this, the year closed with profits of 720 million, on the strength of an operating result of 989 million and a positive impact of taxes of 425.

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Growing results
But it is the fourth quarter that shows, the bank explains in a note, the bank’s “achieved ability to generate sustainable profitability”. The gross operating result, in the last period of the past year, grew by 65.6% compared to a year before to 333 million thanks both to rising revenues (+16.6%) and lower costs (-2.3% ). «Now Monte Paschi is a structurally improved bank». Now “we want to proceed as quickly as possible towards our final destination and after difficult years I think I can say that we are confident that we can reach our safe haven”. Lovaglio confirms the goal of a pre-tax profit of 700 million euros in 2024 and goes further: “We believe that we will approach this target as early as 2023”. On the capital front, MPS expects Cet1 to be higher than the 14.2% planned for 2023.

The unknowns
Unknowns remain and are mostly related to legal risks. In January, as “punctually” happens on the eve of the accounts, recalls Lovaglio, the bank received a letter claiming damages for 700 million euros, in relation to the financial information provided in recent years. Claims which must be added to the total claims for damages, both in and out of court, which amounted to approximately 4.1 billion euros, compared to 4 billion euros as at 30 September and 3.4 billion at the end of 2022. Lovaglio , however, also recalls the two favorable sentences that arrived between January and February. In all of this, while in recent days all the possible suitors – first Unicredit, more recently Banco Bpm – have shown coldness with respect to the hypothesis of proceeding with an acquisition of the bank, the share suffers on the Stock Exchange where it loses 3.12% , at 2.32 euros, well above the price of the last increase. Day of accounts yesterday also for Bper. The bank led by Piero Luigi Montani records a net book profit of 1.449 billion euros in the light of the impact of the “badwill” relating to the acquisition of Carige. Excluding extraordinary items, according to a note from the bank, the «adjusted» figure is equal to 502.8 million, stable compared to the 525 million euro of the previous year, beyond market expectations. The coupon for shareholders is doubled: 12 cents per share.

The other results
Banca Mediolanum closes 2022 with a profit of 521.8 million (-27%) and will distribute 0.50 euro per share against 0.58 a year ago, with a balance of 0.26 euro after the 0 down payment November 24th. CEO Massimo Doris expects “an important improvement” for the current year. As for the stake in Mediobanca (3.4%), the banker renews his “absolute trust” in CEO Alberto Nagel who will present the accounts for the first six months today.