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December 17, 2021 The Board of Directors of Monte dei Paschi has launched the new Strategic Business Plan 2022-2026 which replaces in its entirety the previous Strategic Plan 2021-2025. The new Plan sets the capital increase to be carried out by 2022 at € 2.5 billion. This was announced by the Sienese bank.
strategic objectives of the plan
there are four: "a discontinuity" of the business model for a "new and leaner" MPS; a "radical simplification of the Group's operating model and structure"; the continuation of the bank's de-risking and resilience process; the creation of value for an adequate remuneration to shareholders. The plan's projections are based on a capital increase of 2.5 billion to be carried out in 2022, also in consideration of the organic generation of 170 basis points of Cet1 carried out in the first 9 months of 2021 which will therefore allow to invest around 800 million in the IT, most of which will be implemented in the first years of the plan; approximately 1 billion in restructuring costs and complete compliance with the indications emerged during the 2020 stress test and with the current Mrel requirements.
The Plan will be presented to the European Central Bank, the Single Resolution Board and the DG Competition, while the dialogue between the Ministry of Economy and Finance and DG Competition on the privatization of the Sienese bank continues. Furthermore, as is known to the market, the Ministry of Economy and Finance maintains a dialogue with the DG Competition regarding its participation ". The positions of the Authorities, it says, constitute a prerequisite for the planned capital strengthening operation". The bank stresses that it is currently unable to provide a precise estimate of the time required for the competent authorities to complete the respective processes and that the plan may need to incorporate any changes to reflect discussions with the authorities.MPS will provide the authorities with the utmost commitment to collaborate so that the aforementioned processes can be completed successfully and promptly ".
voluntary exit plan
, not explicitly quantified in the note, will allow annual savings of 275 million and therefore will not be less than 3 thousand units. Savings, it says, which could be achieved for the most part by 2024.
As regards the
main financial objectives
, the plan estimates a
below 60% by 2024, with further reductions in the following years; a cost of risk of approximately 50 basis points, consistent with the bank's asset quality; a
pre-tax profit of
approximately 700 million in 2024;
of about 8.5-9% in 2024, and about 11% in 2026. The capital ratio
Cet1 Fully loaded ratio
is indicated above 14% in 2024 and equal to approximately 17.5% in 2026, "before dividends and before the positive effect of the revaluation of the DTAs deriving from the Plan".Keywords: