Banca Carige SpA’s administrators said the struggling Italian lender isn’t looking at any nationalisation plan, pushing back against political leaders who say state ownership is the government’s goal.
“We are absolutely not working on the idea of nationalisation,” Raffaele Lener, one of three European Central Bank-appointed administrators, said in an interview with Il Messaggero yesterday. “There is a problem of agitation and that may have an impact on the normal operations of the bank,” he said.
The Genoa-based lender has been the focus of a hot political debate since the ECB last week took the unprecedented step of putting the bank under administration.
The Italian government followed with the approval of state guarantees for any future bond issues by Carige and said it could back a so-called precautionary recapitalisation to ward off serious disturbance to the economy.
Italy’s populist leaders Matteo Salvini and Luigi Di Maio on Wednesday clashed with Finance Minister Giovanni Tria over the fate of the bank. Both deputy premiers said the government should nationalise it, while the finance chief told the Italian parliament that a market solution is the best option. However, Di Maio said yesterday that there’s no contradiction between his position and the finance minister’s.
“If someone buys it first, the state won’t put a euro into it and that’s a market solution,” he said in a Rai radio interview. “But if the state puts even one euro into it, the bank belongs to the state and to the citizens.”
The deputy prime ministers’ positions contrast with efforts by Carige’s administrators to shore up the bank’s balance sheet, reduce bad loans and firm up a business plan to make the lender more attractive to a possible partner. Pietro Modiano, another Carige administrator told La Stampa that a capital increase of about €400mn ($462mn) would be adequate to secure the bank. He has previously described nationalisation as a “theoretical, extreme” hypothesis. Despite the debate over nationalisation, a government decree of support and the possibility of state guarantees for Carige bonds will help the bank find a solution, Lener said.
The bank has been in contact with 10 potential buyers including Italy’s UniCredit SpA and Banco BPM SpA and France’s BNP Paribas SA and Credit Agricole SA, which say they may be interested if Carige can reduce its non-performing loans and borrowing costs, according to a person familiar with the matter.
The lender, which was put under temporary administration by the European Central Bank, suffered a peak in deposit flight on Monday, mainly from institutional clients, the person said. An Italian government decision aimed at guaranteeing Carige’s future bond issues should limit the outflow, according to the person.
Carige, with a €24bn balance sheet, isn’t seen to pose a significant risk to the nation’s banking system. However it puts pressure on populist leaders to show that their solution to a bank crisis is different from the previous taxpayer-backed rescues that they heavily criticised.
The Italian state now owns about 68% of Banca Monte dei Paschi di Siena SpA after the government put €5.4bn into its recapitalisation. It also committed about €17bn to take on the bad assets of two Veneto-based banks and provided guarantees against further losses as part of their sale to Intesa Sanpaolo SpA.
A customer uses an ATM at a Banca Carige branch in Rome. u201cWe are absolutely not working on the idea of nationalisation,u201d Raffaele Lener, one of three European Central Bank-appointed administrators of Carige, said in an interview with Il Messaggero yesterday. u201cThere is a problem of agitation and that may have an impact on the normal operations of the bank,u201d he said.
