In Piazza Affari, even today’s session is not reserving anything good for the banking sector securities which all travel in the red, showing greater weakness compared to the Ftse Mib.

Banks in red even today in Piazza Affari

After closing yesterday’s session, the decline, with the sole exception of Intesa Sanpaolo, which stopped close to parity, today all banks are moving negative.

To have the worst is Unicredit which falls by 1.48%, closely followed by Banco BPM which falls by 1.42%, while Bper Banca falls by 0.97%.

Not far away we find Intesa Sanpaolo which shows a decline of 0.88%, while it defends itself better than the other Mediobanca, with a much more contained decline of 0.18%.

Banks in decline with rising spreads, but BTPs afloat

The securities of the sector are not helped by the performance of the bond market, where the BTP-Bund Spread rises by 1.58% to 102.8 basis points, while the BTPs see some purchases, with the 10-year yield falling by 0 , 38% to 0.786%.

The bankers of Piazza Affari also find no support in the indications received yesterday by the president of the Supervisory Board of the ECB on the subject of dividends.

Bank dividends: ECB verdict on ban removal arrives in July

It should be remembered that last year the securities of the banking sector did not pay the coupon due to the coronavirus crisis that led the ECB to prohibit distributions to shareholders.

In addition, last December the Eurotower recommended the suspension or limitation of the payment of dividends and buy-back plans until 30 September 2021, however imposing limits that provided for distribution only within certain thresholds.

Already last March, President Enria had hinted that in the absence of particularly negative developments, the banks could have resumed their usual dividend policy.

Just yesterday Andrea Enria, chairman of the supervisory board of the ECB, indicated that on 23 July the Eurotower will take a decision on the removal of restrictions on shareholder remuneration after 30 September.
Enria during an online conference said yesterday:

“We will put an end to the current bank dividend recommendations hopefully soon. We are scheduled to make a decision at our board on July 23 and will announce it shortly thereafter.
It is clear that there is still a lot of uncertainty and the credit risk has not materialized in the books of the banks, so prudence should still be a guiding light in the coming months. “

Bank dividends: Equita SIM’s expectations

In light of the significant improvement in economic prospects and progress of vaccination campaigns in Europe, Equita SIM analysts believe that the removal of the dividend ban is likely.

However, experts highlight that the ECB’s attitude remains to be assessed, whether it is in favor of a generalized authorization, or whether restrictions will remain assessed on a case-by-case basis on the basis of the capital and profitability profiles of the individual institutions.

From this point of view, Enria urged banks to take measures to improve their profitability, investing more in digital, setting more sustainable business models and evaluating consolidation strategies.

5 titles to keep an eye on

In the event of the removal of the dividend ban, the Equita SIM experts believe that the parties that should benefit most are Intesa Sanpaolo, Unicredit, Banca Mediolanum, Banca Generali and BFF Bank.

As regards the two asset management groups in particular, the potential coupon yield is 7.8% for Banca Generali and 9.1% for Banca Mediolanum.

Dividends: focus on UNicredit and Intesa Sanpaolo

In the case of the two big names in the banking sector, there is talk of a potential return of over 6% for Intesa Sanpaolo and 6.2% for Unicredit.

The latter has already issued a coupon of 0.12 euros on April 19, but is now awaiting the response of the ECB after having proposed the distribution of over 650 million euros via buy-back.

Intesa Sanpaolo, on the other hand, on 24 May issued a coupon of € 0.0357, but if the go-ahead from the Eurotower arrives, it will be able to pay reserves and therefore another dividend of € 0.1 per share on the 2020 profits.
The Messina-led group also spoke of an interim dividend on 2021 earnings, with a target payout of 70%.

Trend-online Deputy Director, born in 1978.
After completing his studies at the Classical High School “Antonio Calamo” of Ostuni I entered the world of economics.
For about twenty years I have been dealing with Stock Exchange and Finance. After having worked as a financial promoter for several years, in 2005 I joined the Trend-online team as an editor, to later become deputy director of the cylinder head. Among other countless activities, I take care of maintaining relationships with all the experts, analysts and traders, consulted daily by Trend-online.

My motto is? “Life is like a mirror, if you look at it smiling it will smile at you”.