Intesa Sanpaolo merged with Banca Populare di Vicenca and Veneto Banca and 17 mio € state aid

Intesa Sanpaolo is Italy‘s 4th biggest Corporate and second biggest bank. It has with 3,900 branches the largest domestic network, 13% market share and 11.1 million clients. It‘s turnover is 49.9 bio $ with a profit of 4bio$. Intesa say that it has particular strength in the wealthiest areas of Italy: strong retail presence covering more than 70% of Italian household wealth. Intensa has branches and represantative offices on every continent.

This conglomerate merges with Banca Populare di Vicenca and Veneto Banca. It pays 1€ for both banks. And that‘s not all. The Italy Government will pay 5.2bio€ Intesa process the merging with the two banks, which have many bad loans they can‘t write off without bankruptcy, so the ECB. 3900 of the 10100 employees will loose their jobs. The 5.2bio€ contain 1.2bio€ to keep jobs Intesa would also cut. 1600 of the 960 affiliates will be closed. Further the Italy government will pay Intesa 12bio€ to write down the bad loans of the two banks into a bad bank. The loss will be devided into parts for the state, the shareholders and

Intesa was dealing hard with the government of Italy, who has no choice than to underwrite that deal. A bankruptcy would lead to social disorder with many protests the government fear. And the two banks would have needed 6.4bio€ imediately to stay alive. And there were no more investors for one of the two banks. Intesa merges with the profitable part of the banks. Bad loans will be written off to bad banks.

The parlament of the EU permits the government of Italy the excemption to process the resolution of Banca Populare di Vicenca and Veneto Banca with the law of Italy. This is possible because none of the banks was relevant to the economical system of Italy. Now the Italy parlament has 60 days to ratify that agreement.

But with this procedure the tax payer will pay 17bio€ for a bailout of two banks. And this the EU wants to avoid and created the SRB. The SRB was created only for system relevant banks. Other banks should file bankrupty, so the EU parlametarians thought. Italy is the fourth biggest economy in the EU. Many banks in Italy have bad loans, so the financial system is very instable now. Italy could trigger the next financial crisis in Europe and EU. So Germany thinks about to extend the SRB to the smaller Banks. This would prevent that states spare shareholders to pay for the losses.

Now the equity holders and the holders of subordinated bonds are supposed to take the first losses. But many of the subordinated or junior bonds are sold to households and individuals. This will be pollitically very difficult for the government. But to inject state funds to soften the impact on private persons will cost hunge amounts and will be against EU rules on states aid.

The Banca Popolare di Vicenza Group was ranked eleven among the Italian banks based on total assets, Veneto Banca is a local bank. The merging of the two banks without risks brings Intensa Sanpaolo a little closer to the leading Uni Credit Group.

Banks of South Europe get status to find new investors

Nordic banks, like the banks of Norway, Denmark and Finland were long seen as a possibility to invest money with attractive profits. Since the crisis in finance sector in 2008 the banks in Europe, the nordic banks excluded, were at risk and don‘t perform very good. But now the circumstances that made the nordic banks to a secure haven for investors changes. As the banks reststructuring and bad assetts were written off the status of the south European Banks become more interesting for investors.

One example is Santander Bank. Banco Santander take over the Banco Popular Espanol SA, and will start the digital bank Openbank, where the customers will be able to do any business swith the smartphone. Openbank will have no counterbusiness. Until now Santander has the highest density of branches of european banks. This could change and this will decrease the cost ratio. Santander has a cost ratio of 57 today, the average ratio of spanish banks is 61.

Santander acts globally. The profit spread is following:
Brasil 21%
Great Britain 20%
Spain 12%
Mexico 8%
Chile 6%
USA 5%
Portugal 5%
Argentine 4%
Poland 3%
oter countries 3%
Santander Consumer Finance, total 13% 

Santander has made an takeover agreement with Citigroup for the privat customer business in 2016. Santander will also improve the assett management.

The price-earnings-ratio is 12 and the forecast of Santander is 11 for 2018. The ratio of price to assett value is 0,9, means that the value of the company is higher than the assett value. Also the dividend is with 3.6% good. That means the assett value has good reason to increase and the investor a good reason to invest.

Santander is rated by Standard and Poor‘s and Fitch

Ratingagency

Long Term

Short Term

Outlook

Standard & Poor’s

BBB+

A-2

stabil

Fitch

A-

F2

stabil

Santander has 125 million customers and 20.9 mio digital customers. 

The cost-income-ratio is 48%. With the successful implementation of Openbank this ratio will decrease.

Santander is restructured and it‘s new strategy is succesful. The deposits increased from 12 biopound sterling to 65 bio pound sterling. The loyal customers increase about 420,000 customers since 2012 and the bank trim the credit costs 25%. And teh customers of Santander are contended with their bank. In 8 of the 9 core countries the bank is under the first three of the branche of business. The chart of Santander is risen from 3.50 € to 5.93€ yty.

Santander accepts responsibility in the countries ist make business and is engaged in social projekts. The bank is engaged in 1200 Universities, supports 35.000 students with studentships, give 250.000 small credits in latin america and supports 214 schools in Brasil.

Reasons Santander has the best rank in Dow Jones Sustainability Index.

So Santander is an interesting object for investors.

https://de.finance.yahoo.com/nachrichten/banco-santander-handy-statt-bankschalter-091354676.html
http://unternehmen.santander.de/de/investor_relations/aktuelles/aktuelles.htm

Saudi Arabia and Egypt made an unusual deal

Tiran and Sanafir are two islands in the Street of Tiran. The Street of Tiran conect the Gulf of Akaba and the Red Sea. It is between the Sinai and Saudi Arabia. The United Kingdom controlled the two islands since 1906. A treaty of the United Kingdom with the Osmanic Empire was the source that Egypt said that the islands are their territorium. As Egypt was in war with Israel, Saudi Arabia said that Saudi Arabia had rented the islands to Egypt. This way they forestall that Israel occupied the islands. That is the source Saudi Arabia say the islands would be Israel if they didn‘t intervene so they are their territory.
That the islands are very important in strategic terms shows as Egypt closes the Street of Tiran at 22th of May 1967. This was only possible because of the islands. The effect was that Israel couldn‘t reach the Indian Ocean. As result Isreal started the 6 day war. The Street of Tiran is also very important for Jordania as it is the only connection for Jordania to the Oceans and the large cargo ships and tankers.
On 9th of April 2016 the Egypt government noticed that the islands should given to the souvereignty of Saudi Arabia, after King Salman of Saudi Arabia visits Egypt. The reaction of the people were big demonstrations, demanding the resignation of president As-Sisi. After a battle of judges a special court for fast trials decided that the islands can be given to Saudi Arabia. Before that judgement the supreme court of Egypt decided that the constitution has no option for giving territory to another country. But the government said that the islands never had been territory of Egypt so Egypt can‘t give this territory away. Egypt will only hand over the islands to Saudi Arabia. The demonstrations hold on.
It is very astonishing that the Egypt‘s government give the islands to Saudi Arabia because beside the strategic significance the islands are component of the Ras-Mohammed-Nationalpark and with the coral reefs befrore them they are also very weighty for the tourism industry.
But it is a long dispute presidentAs-Sisi resolved. Saudi Arabia gives Egypt a lot of money to support the industry and the country. In September 2016 it cuts the oil supply to Egypt because of multiple dissenses. It is possible that Egypt‘s president has no choice than to give in to Saudi Arabian demands. But if Egtypt has not the money to uphold their affairs of state without foreign money the souvereignty of Egypt is to be discussed and this means the state of Egypt by itself, because a state must be souvereign to be recognized.