Italian Bank Shares Tumble After Investors Snub Vicenza IPO

  • Stocks sold after Atlante fund buys most of Vicenza shares
  • Other lenders to seek capital increases, bad-loan sales

Italian bank stocks dropped in Milan trading after private investors snubbed an initial public offering by Banca Popolare di Vicenza SpA, leaving the country’s bank-rescue fund to buy almost all the shares.

UniCredit SpA, one of the main investors in the Atlante fund, fell as much as 7.1 percent and was down 2.6 percent at 3.29 euros as of 12:01 p.m. Intesa Sanpaolo SpA, the fund’s other main backer, fell as much as 3.4 percent before rallying to trade at 2.45 euros, up about 1 percent. The four biggest decliners in the STOXX Europe 600 Banks Index were Italian lenders.

Italian Prime Minister Matteo Renzi’s government is pushing the country’s cooperative lenders, known as popolari, to become joint-stock companies as lenders try to rid themselves of an estimated 360 billion euros ($414 billion) in bad loans. Veneto Banca SpA plans to raise as much as 1 billion euros and trade its shares on the market.

Italian regulators will decide as soon as Monday whether Pop. Vicenza is eligible for a listing on the Milan exchange after the state fund subscribed to all but 7.7 percent of the share sale. If the bank doesn’t get a listing, Atlante will buy all the shares, Pop. Vicenza said in a statement on Saturday.

Ten institutional investors subscribed for a 5.1 percent stake in Pop. Vicenza, which was priced at 10 cents a share, the bottom of the bank’s range. Atlante, which raised about 4.8 billion euros from investors, subscribed to 1.39 billion euros of the bank’s stock. The fund, backed by state lender Cassa Depositi e Prestiti, is also expected to backstop sales of non-performing loans by various Italian banks.

Banca Monte dei Paschi di Siena SpA is seeking a buyer while the European Central Bank has requested that Banca Carige SpA draw up a new funding plan and strategic review. On Friday, Banca Carige said it rejected an offer from U.S. investment firm Apollo Management International LLP to shore up its finances because the bid wasn’t binding and the U.S. fund sought exclusivity for talks.

Earlier today, Intesa Sanpaolo announced the sale of its Setefi and Intesa Sanpaolo Card payment units to a group that includes Bain Capital and Advent International in a deal valued at 1.04 billion euros.

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