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Veneto Banca

From Alfawiki
Veneto Banca S.p.A.
Company typeJoint-stock company (Società per Azioni)
IndustryFinancial services
PredecessorBanca Popolare di Montebelluna
Founded1877
Defunct2017
FateLiquidation; selected assets acquired by Intesa Sanpaolo
SuccessorIntesa Sanpaolo (selected assets)
Headquarters
Montebelluna
,
Italy
Area served
Italy, Eastern Europe
Key people
Fabrizio Viola (board member)
ProductsBanking, financial services
OwnerAtlante (majority shareholder from 2016)

Veneto Banca S.p.A. was an Italian financial institution based in Montebelluna, Italy, currently undergoing liquidation.

In December 2015, the bank transitioned from a cooperative society structure to a joint-stock company. After an unsuccessful initial public offering in June 2016, the private-sector rescue fund Atlante took control. In 2016, significant loan impairments and a controversy involving share sales to depositors emerged, leading the European Central Bank to declare the bank insolvent on 23 June 2017. Subsequently, Veneto Banca was divided into performing and non-performing segments. Intesa Sanpaolo, Italy’s largest bank by market capitalization, agreed to acquire selected performing assets and liabilities for a nominal amount. The acquisition agreement was finalized on 26 June 2017, following the European Commission’s approval of state aid to Intesa Sanpaolo.

According to data from 2015, Ricerche e Studi ranked Veneto Banca as the sixteenth largest Italian bank by total assets. It was also among the fourteen largest Italian banks subject to direct supervision by the European Central Bank.

History

Founded in 1877 as Banca Popolare di Montebelluna, the institution expanded during the 1960s through acquisitions of local cooperative and savings banks, such as Banca Popolare di Intra. A period of substantial growth began around 2000, with expansion into the north-west and Southern Italy regions as well as acquisitions in Eastern Europe.

Between 2001 and 2002, Veneto Banca acquired 29 branches of Nuova Banca Mediterranea from Banca di Roma, which were integrated into Banca Meridiana (previously Banca Popolare del Levante). In 2010, Banca Meridiana merged with another subsidiary, Banca Apulia. Throughout the 2010s, Veneto Banca also acquired Cassa di Risparmio di Fabriano e Cupramontana (CARIFAC), which primarily operated in Marche, Umbria, and Rome.

The bank was one of Italy’s fourteen largest institutions under direct supervision by the European Central Bank. It successfully passed the stress tests conducted in 2014 after recapitalization measures.

Demutualization, Atlante intervention and insolvency

Following Decree-Law No. 3/2015, Veneto Banca converted from a cooperative limited partnership () to a joint-stock company (Società per Azioni) in December 2015. This change introduced a one-shareholder-one-vote system regardless of shareholding size. The legislation required People's Banks with assets exceeding €8 billion to register as limited companies. During this process, Veneto repurchased shares worth €14.7 million at €7.3 each.

In early 2016, the bank planned a €1 billion capital increase due to its Common Equity Tier 1 (CET1) ratio falling below the European Central Bank’s minimum requirement of 10.25% following the 2015 Supervisory Review and Evaluation Process (SREP), alongside intentions for an IPO on the Borsa Italiana. As of March 31, 2016, net book value per share stood near €15.5 (€3 nominal value), but weak investor demand forced new shares to be priced between €0.1 and €0.5. The IPO attracted minimal interest; only one institutional investor participated while existing shareholders subscribed merely 2.2%. Consequently, the private-sector rescue fund Atlante, which had underwritten the offering following Intesa Sanpaolo’s withdrawal, became majority shareholder by subscribing €988.6 million in new shares, acquiring a 97.64% ownership stake. This raised the CET1 ratio to approximately 11%, though it declined to 10.74% by June 30, 2016.

Further deterioration of capital occurred due to increased write-downs on non-performing loans (NPLs) and ongoing SREP capital requirements (Tier 1 ratio at 10.25%), along with additional regulatory guidance. On June 30, 2016, Tier 1 ratio was at 10.74%, marginally above regulatory minimums. In January 2017, Atlante deposited €628 million intended for future capital increases. On February 2, Veneto Banca issued €3.5 billion in state-guaranteed bonds maturing between 2019 and 2020; an additional €1.4 billion was issued on June 1.

On January 9, 2017, Veneto Banca proposed repurchasing shares sold between 2007 and 2016 at a price equal to 15% of their original value to reduce legal expenses related to mis-selling allegations. By April 11, roughly 72.6% of shareholders accepted this offer totaling €248.5 million.

On March 17, 2017, Veneto Banca together with its sister institution Banca Popolare di Vicenza requested precautionary recapitalization from the Italian government amid a €20 billion rescue fund established in December 2016.

The business plan for the period from 2017 to 2021 included consideration of a potential merger with BPVi; Fabrizio Viola—chairman of BPVi—also held a position on Veneto Banca’s board. However, ECB stress test worst-case scenarios revealed a capital shortfall of €3.1 billion with a CET1 target set at 8%. After accounting for Atlante’s contribution, Veneto sought investors—including government support—to cover the remaining gap of €2.472 billion.

By April 3, board-approved draft financial statements indicated a CET1 ratio as low as 6.39%, excluding Atlante’s forthcoming capital injections and reflecting substantial loan impairments.

Mid-2017 reports suggested that ECB required private-sector recapitalization before permitting state aid; however, Atlante announced insufficient funds for further investment and major Italian banks supporting Atlante declined additional funding commitments.

Liquidation

On 23 June 2017, the European Central Bank alongside the Single Resolution Board declared both Veneto Banca and its affiliate BPVi insolvent; however, they did not fulfill the criteria necessary for resolution by the board. Consequently, the Italian government decided to liquidate the banks in accordance with domestic legislation, dividing their operations into separate good and bad bank entities. Following interest in acquiring select performing assets, Intesa Sanpaolo entered into an agreement on 26 June to acquire specific assets and liabilities from both institutions, with the exception of Banca Intermobiliare. The European Commission authorized €4.785 billion in state aid to Intesa Sanpaolo aimed at facilitating branch closures due to overlapping networks and recapitalizing the viable portions of the banks. In line with the "bail-in" regulations, Atlante, other shareholders, and subordinated bondholders were not compensated; nonetheless, Intesa established a dedicated fund to reimburse bonds held by retail investors.

From 2015 through 2017, Italy’s banking sector contributed over €4 billion via compulsory contributions to support the resolution of four smaller banks. This included €280 million through the voluntary scheme managed by FITD, invested in C.R. Cesena, and €3.4 billion allocated to the Atlante rescue fund for BPVi and Veneto Banca. On 15 June, FITD announced it lacked sufficient resources to intervene in these rescues, with its voluntary scheme remaining inactive due to absence of consensus among members.

Subsidiaries

Former subsidiaries

Equity investments

former
  • Banca Consulia (previously Banca IPIBI) (25.52%)

External links

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