Italy's banking system has got a fresh injection of cash from the private-equity industry in exchange for a profitable business.
How much family silver there is left to sell is another matter.
Tuesday's sale of Allfunds, a fund-distribution platform, to Hellman & Friedman LLC and Singapore's GIC will net Intesa Sanpaolo SpA about 800 million euros ($845 million).
Include the disposal of Setefi, Intesa's payments arm, and the sale of Istituto Centrale delle Banche Popolari SpA by its owner banks in 2015 and you get to about 4 billion euros of asset sales by Italian lenders to private equity firms over the past two years.
Deals like these have helped keep the horror show that is the Italian banking system on the road. They've also allowed private equity firms to grab fast-growing businesses that could thrive outside their former parent's control.
This is a good thing for hard-pressed bank shareholders and government officials nervous about lenders' capital levels. Intesa may be one of the strongest banks in the country, but it has had to pay for others' mistakes. Funding Italy's deeply flawed bank rescue fund, Atlante, has led to a 227 million-euro writedown for Intesa and may lead to a further 773 million euros, according to UBS. The gain from selling Allfunds will be useful.
It's also a good thing for Allfunds itself. It's a high-return, low-capital business, and an independent Allfunds should be able to attract a wider range funds to its electronic shopfront. Under private-equity ownership, it should also be better placed to fund acquisitions and capture more assets, thus helping to offset the revenue squeeze from falling fees.
It's hard to escape the feeling, though, that we are getting closer to the end than the beginning of the available store of good assets that can be sold to prop up Italy's banks.
Investors and bankers are doubtful there's much more that could be offloaded without cutting into core strategic businesses like asset or wealth management.
The real opportunity is in clearing Italy's backlog of 350 billion euro of bad loans -- but that remains stubbornly elusive.
Atlante was supposed to help set a price for these loans, but it has spent its firepower rescuing failed banks. And Italy's legal system makes it hard to know how much money bidders can expect to recover from these loans.
The Italian NPL market has been close to "non-existent," former Unicredit CEO Alessandro Profumo complained last month. The hope is that this year brings some kind of long-expected thawing of this market.
Without that, though, it's hard to imagine many more good news stories coming out of Italy's banking industry. Over the past year, the country's top banks have under-performed their European peers. The government's rescue plan for small banks risks running afoul of EU rules that demand losses be inflicted on bondholders. And there's a lack of confidence in the future that goes right to the top: The head of Atlante recently said he felt "bitter and disillusioned" over the lack of a clear strategy on clearing bad bank debts.
Short term, a deal like Allfunds is a good thing for private equity investors, but only a salve for shareholders in Italian banks. Long term, it may end up being seen as the last of the easy sells.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
There's also UniCredit SpA's 3.5 billion-euro sale of its Pioneer Investment arm to French fund manager Amundi SA.
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