Intesa Funding Not Affected by Italy Debt Contagion, CEO Says

Intesa Sanpaolo SpA (ISP)’s ability to raise funds hasn’t been affected by the spread of the region’s debt crisis to Italy, said Chief Executive Officer Corrado Passera.

“I don’t see any risk of a credit crunch,” Passera said at a conference in Rimini, Italy. “Lending to families and companies has gone better in Italy than in the euro region in the second quarter. We are prepared for difficult moments. That’s why we did a capital increase.”

Shares of Intesa, one of the biggest holders of Italian government debt, have fallen more than 40 percent since the beginning of July as investors began to dump Italy’s bonds on concern the country would become the next victim of the region’s debt crisis. Passera said the stock has been excessively punished because it’s “seen as a proxy for Italy.”

Intesa shares declined 2.7 percent to 1.102 euros today, the lowest close since July 1997.

“Intesa is mainly focused in Italy, and is considered the systemic bank in the country, so it’s obvious that it has to show a positive view on the country when it is under fire from foreign investors,” said Wolfram Mrowetz, chairman of Alisei SIM in Milan, which oversees 200 million euros ($287 million) and doesn’t own shares of the bank.

Passera said he was confident that Italy would weather the crisis and that the bank had increased its holding of government bonds in the first half. Intesa boosted its Italian bond holdings to 64 billion euros from 61 billion euros in the first half, according to its earnings presentations.

“The negative evaluation of European government bonds and in the last weeks of Italian government bonds doesn’t help, but we are convinced about the value and the validity of these investments,” Passera said.

The chief executive of Italy’s second-biggest bank said that he is interested in investing in Poland if the price were “reasonable,” and there was “nothing to announce” as far as a possible bid for Bank Millennium SA, a Polish unit of Banco Comercial Portugues SA.

“We have to look and find investment opportunities at prices that are interesting to us,” he said. “There is nothing to announce as of today.”

To contact the reporter on this story: Sonia Sirletti in Rimini at ssirletti@bloomberg.net; Chiara Vasarri in Rome at 6325 or cvasarri@bloomberg.net

To contact the editor responsible for this story: Andrew Davis at abdavis@bloomberg.net

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