Genoa - Three consecutive stock market flops, 23% of the capital evaporated from Thursday to Monday. In the end someone came in to buy the stock: yesterday Carige stock saw a 7.6% recovery. Russian mountains, they call them at the Stock Exchange in Milan. Speculative manoeuvres that no one is able to stop, not even the iron-clad European regulations.
In the late evening, Cesare Castelbarco Albani, in his office on the fourteenth floor of the banks’ headquarters, the only one that is illuminated in a building that has been deserted, is more worried about the comparison - which is inevitable at this point - between the four banks that were bailed out by decree and Carige. “It is a comparison that doesn’t hold up. There’s nothing there, our situation has absolutely nothing in common with theirs. Anyone who makes that comparison is making a big mistake. And it is an insult to the Carige Group’s 5,003 employees.”
President, the stock lost 22% in a month. The question that savings and current account holders are asking is: what is happening at the bank?
“It is probably the case that very aggressive speculative operations are concentrating our stock. Sales out in the open commissioned by funds, for example. When sales of this nature move 0.73% of the capital in one day, as occurred on Monday, it is fairly clear what is going on.”
It may be clear, but it is still a matter of concern.
“Unfortunately, for publicly traded companies of our size CONSOB, for the European Regulations, can only intervene when the stock loses over 20% of its value. But our indicators, if I may say so, are those of a healthy bank: the equity soundness index is at 12.2%, over the 11.25% that is required, and the liquidity index is 138%, versus the 90% required by the ECB. These are figures that allow us to move forward with our strategic plan without difficulty.”
Has your target for a return to profitability in 2017 been confirmed?
“Certainly. It is also for this reason that we are working on further cost-saving measures. On 19 January we will have a meeting to go over the 2016 budget.”
However, the current stock market figures have been merciless. There’s no point in hiding it, this has caused bewilderment among clients.
“We are aware of the problem. The general confusion that was created in the world of banks, after the four bailouts and the almost concurrent introduction of the bail-in, has not helped to make Carige’s objective situation understandable. And I repeat, it is a bank that is in good health. But I understand that the bailout of four banking institutions that is under way - to which Carige, like the other Italian banks, will contribute 42 million - may have created a scare among our clients. And when we add the specious information that has been circulating about our bonds, the circle closes.”
Why do you call it specious?
“Because those bonds are not subordinated and they have nothing to do with the bail-in regulations. Those who hold them have no reason to be concerned: they are ordinary bonds.”
Haven’t you issued subordinated bonds, as well?
“No. You must understand that the last issue on the retail market goes back to 2008. Unfortunately, you see, there are some people who like to fan the flames...”
Who is it?
“It could be many different people, we aren’t able to identify them. But it is clear that there are a multiplicity of interests and interested parties. The truth, which may be irritating, is that in less than two years, Carige has done extraordinary work. We have completely redesigned the bank, putting it in a position from which it can play its role at the national level. Triple action was taken to clean up our accounts, restart the commercial structure, and take cost-saving measures. We made an agreement with the unions for 600 people to leave without the slightest labour conflict. We incorporated the savings banks of Savona and Carrara, also developing those areas, and kept both the Cesare Ponti bank and Creditis in the group. Cesare Ponti will become the group’s private equity division. We haven’t abandoned companies or families: in one year we provided new credit lines worth a billion euros. Today the situation in the market is not easy, considering the level of taxes, and yet the bank is able to return to profitability.”
But the shareholders, small and large, have seen the stock lose more than 50% in one year.
“That is true, but we mustn’t forget that in the sector there has been a difficult situation all around. We have been penalized more, exactly like MPS, because of events that happened in the past. But there is no rational link between the performance of the stock and the bank’s management. Which is one of the soundest in the system.”
So you deny the rumours of a new capital increase?
“I rule it out.”