Banca Carige, why a bank is sold for 1 euro: the explanation

At least two offers have arrived to buy Banca Carige, which has been in crisis for about ten years. But buyers do not want to spend on rehabilitating the institution, now managed by the Interbank Fund.

In three (at least) for a bank. This is the situation in which Banca Carige, a banking institution in Genoa and 16th Italian bank in terms of assets, finds itself. For years it has been in a deep crisis, since in 2012 it marked the first negative balance sheet, before the Bank of Italy investigations from which several offenses emerged.

Bper (formerly Banca Popolare dell’Emilia Romagna) has officially declared its interest in buying it for 1 euro, but at the same time requires that the bank be recapitalized for one billion euro, in order to restore the balance sheet and be able to start (almost) from zero. But the main shareholder – the Interbank Fund (in which all private banks participate), which had bailed out the bank in 2019 – has rejected the offer for now. So much so that two more would be delivered: by the French Credit Agricole and by the Cerberus Fund. By Monday, the board of directors of the Interbank Fund should decide which proposal to give priority and exclusivity to.

But why at 1 euro?

The value of 1 euro is essentially symbolic, in fact it could not be sold for 0. The same happened also for the sale of the Venetian banks to Intesa San Paolo. In fact, Banca Carige – he explained Andrea Resti (Bocconi) to Sky TG24 Business – it is as if it were a company “that has goods in stock, in this case credits, whose value is very difficult to estimate. It is quite difficult to understand how many of these can in fact be collected over the years. come: the risk of insolvency of the debtors is quite substantial “. Watch the entire speech by Professor Andrea Resti in the video.

Retrieve below the entire episode of Sky TG24 Business of January 7, 2021, in which Angelo Drusiani (Edmond de Rothschild) and Guido Maria Solari (Bergs & More).