Intesa Sanpaolo, bad loans halved by 2021

19 February, Stop Secret

The new guidelines presented on 6 February by Intesa Sanpaolo include the reduction of gross bad loans from the current 52.1 billion euro to 26.4 billion in 2021, from 22.5 billion to 12.1 billion net of adjustments by 2021. In past few days, the bank guided by Carlo Messina has announced its intention to transfer NPLs for over 10 billion availing itself of the new accounting principles Ifrs 9 without impacting the profit & loss account. Among the players interested at the NPL management platform along with the 10 billion-euro NPLs and a long-term agreement for the management of the current as well as future NPLs of the bank, there are the Scandinavian group Lindorff-Intrum Iustitia and the Chinese CEFC China Energy Company.

According to what emerged from the presentation of the 2017 results, Intesa Sanpaolo has closed the year with profits of 7.3 billion, including the 3.5 billion coming from the Treasury after the acquisition of Banca Popolare di Vicenza and Veneto Banca. In the 2018-2021 business plan, the objective is obtaining profits for 6 billion with an average growth rate of 12.1% per year. To reach its target, along with the NPLs reduction, the bank aims at a significant cut of the costs and at developing its business with a particular attention on the asset management and insurance activities. To summarize, the guidelines include:

The voluntary redundancy of 9 thousand people (based on the agreement with the unions made at the end of last year) and the closure of approximately 1,100 branches;

The proposal of compulsory conversion of the saving shares into ordinary shares (at a conversion rate of 1.04) without paying any adjustment in cash and the subsequent elimination of the nominal share value from the statute;

The intention to accept new opportunities in order to become “leaders in Europe in the Wealth Management & Protection market, developing also the damages insurance division”, as well as the possibility “to start a partnership with a global company to speed up the strategy concerning asset management” (for this purpose, there’s particular attention towards China).

The creation of a new headquarter in Milan (ISP City) to optimize productivity.

Finally, it’s likely that the group will reduce its legal entities with the merger of 12 subsidiaries, namely Banco di Napoli, Cr Firenze, Cr Pistoia e Lucchesia, Cr Veneto, Carisbo, Cariromagna, Cr Friuli Venezia Giulia, Banca Nuova, Banca Apulia, Banca Imi, Banca Prossima and Mediocredito Italiano.

Source: Stop Secret

Translator: Cristina Ambrosi

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