Intesa Sanpaolo will evaluate further small acquisitions in private banking in Switzerland. And what the CEO, Carlo Messina, said today in an interview with Bloomberg TV, excluding any significant expansion abroad in the coming years. The bank is due to present a new business plan in February, after having bought Ubi Banca last year to control more than a fifth of the Italian market.
Messina explained that it would be easy for Intesa Sanpaolo to increase its profit through another acquisition in Italy, but its market share is such as not to allow it to expand further. “M&A must create value for our shareholders and our market share in Italy makes it impossible for us to do other consolidation operations,” she said. At the same time, overseas growth opportunities are scarce, the central banker continued, as digital advancement in the industry has made a retail presence useless, unless branches are used to sell insurance and wealth management products. .
“So, in theory, the private banking and asset management goals would be interesting for the bank (outside Italy, ed), but the prices embedded in these goals are so high that it makes it impossible to create shareholder value for the moment” , Messina pointed out. Still, it sees room for targeted deals in Switzerland, where Intesa Sanpaolo’s private banking arm, Fideuram, bought the private bank REYL & Cie last year following its 2017 acquisition of Banque Morval.
“Switzerland is a country where we intend to grow through selective acquisitions of small target companies. This is equivalent to hiring private bankers, really small and selective”, Messina remarked. The business model oriented towards asset management and insurance has enabled Intesa Sanpaolo to deal with negative interest rates better than rival banks. Messina assured that Intesa is well positioned to benefit from a rate hike: it would add € 1.2 billion to its interest margin if the Euribor rate went from -0.5% to zero. Not only. The business model and the large NPL reduction work carried out in past years has made the bank less risky and among the best banks in Europe, the CEO specified, also ensuring that ”
On 3 November the bank’s board of directors approved the distribution of 7.21 euro cents per share as an interim dividend on the results of 2021 for a total of 1.4 billion euro, equal to a dividend yield around 2.9%. The interim dividend will be paid on November 24th (with coupon detachment on November 22nd and record date on the 23rd of the month). If we also calculate the total amount of 13.53 euro cents paid in 2020 (3.57 cents last May and 9.96 cents in October), the dividend yield corresponding to the distribution made this year is equal to 8.3%.
Messina then focused on the MPS case, after the negotiations between Unicredit and the Treasury ended with a stalemate, noting that “there is an excessive estimate linked to a possible negative impact. There are also banks in other countries owned by the government, not to mention that the interest margin “and commissions” with the growth of GDP expected in Italy can increase in turn. I am not worried at all, it is not a risk for Italy “.
And speaking of the growth of the Italian GDP “it will be over 6% this year, for 2022 the estimate is over 5% and will continue in the following years. For Italy it is a really good result: for our bank it will be very positive because if families and businesses have confidence this translates into a significant increase in commissions also in the wealth management segment “, concluded Messina, while the Intesa Sanpaolo stock in Piazza Affari rose 0.70% to 2.501 euros . Mps also rose by 0.54% to 1.03 euros. (All rights reserved)
