Popolare Milano Gains After Higher Revenue, Governance Changes
Popolare di Milano rose as much as 5.2 percent and was up 4.7 percent to 46.4 cents as of 10:28 a.m. in Milan trading. That gave the Milan-based company a market value of 1.5 billion euros ($1.93 billion).
Popolare di Milano’s fourth-quarter loss narrowed to 325 million euros from 670 million euros a year earlier, the bank said in a statement late yesterday. Revenue advanced 29 percent to 383 million euros, boosted by higher income from trading and fees. That helped counter a 17 percent increase in bad-loan provisions to 357 million euros.
“The pre-provision operating profit trends are encouraging as the net interest income held up well, whereas many Italian peers disappointed, and costs were under tight control,” Jean- Francois Neuez and Willis Palermo, analysts at Goldman Sachs Group Inc. wrote in a note today.
The board approved yesterday a proposal to transform the bank into a joint-stock company from a cooperative bank.
“In 2012, the bank started a process to turn the group around,” Chairman Andrea Bonomi wrote in the statement. “The project to change the bank’s governance is the natural destination of the path we started a year and a half ago.”
The board will make the proposal, including the cancellation of the per capita vote system, the distribution of 10 percent of capital to employees for free and the setup of a foundation to support employees and their families, to an extraordinary shareholder meeting. The bank also approved a 500 million-euro capital increase to repay state aid received in 2009.
Popolare di Milano’s timetable for governance changes and the capital increase is “excellent news,” Giovanni Razzoli, a Milan-based analyst at Equita Sim SpA, said in a today report.
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