The latest article on the world of banking foundations, published on the 27th of February 2017 in the Business and Finance section of ‘La Repubblica’ headlined “The retreat of the foundations: from owners of the banks to marginal shareholders”, gave a negative account of the foundations which over the years have led their transferee banks and subscribed capital increases, often through debt.
The article refers to Monte dei Paschi di Siena, Genoa, Ferrara and other foundations struggling for survival such as those related to Banca delle Marche and Cari-Chieti.
The article underlines that the members of ACRI should have diversified the risk of investing in the transferee banks in time rather than waiting for the Memorandum of Understanding issued by the Ministry of the Economy and Finance in 2015. Except for the words “not in recent years” the article fails to emphasise that, due to the Chairman’s foresight, Fondazione Roma was the first to successfully complete the procedure to leave the transferee bank, that started in the early 2000s, in compliance with the provisions of the law introduced by Giuliano Amato and Carlo Azeglio Ciampi, having previously implemented a financial management model that generates income and enables the Foundation to pursue the institutional goals without relying on bank dividends.
The article highlights that the Foundation’s net asset value fell from €1.689 billion in 2007 to 1.552 billion in 2015, though failed to emphasise that this was due to a write-down of € 346 million made in 2011, in compliance with the provisions of Law and the accounting principles, as a result of the Bank’s poor performance in that year and the launch of a heavily discounted (almost 43%) capital increase of 7.5 billion, which other foundations failed to implement and, in many cases, still keep their shares at the original value. Therefore the write-down was merely due to the Bank’s structural issues and had nothing to do with factors pertaining to the Foundation’s typical financial management.
Fondazione Roma held the 6th place in the net asset classification from 2007 to 2015 when the Ente Cassa di Risparmio di Firenze divested its shares in the transferee banks Cassa di Risparmio di Firenze and Intesa San Paolo, the only bank that has not shown major problems, thereby increasing its net asset value from € 1.522,2 billion to €1526,2 billion. The Foundations Cariverona and Cassa di Risparmio di Torino moved from the 4th to the 3rd place and the 5th to the 4th place only because Fondazione Monte dei Paschi di Siena disappeared. Although the shareholders of Intesa San Paolo fared better than those of Unicredit, Fondazione Cairplo, which in the article is included amongst the ‘well managed’ foundations, closed the financial year 2015 with a loss of Euro 39 million and had to draw 135 million from the Grant Stabilization Fund to support its activities, proving that holding a substantial amount of the transferee bank’ shares is detrimental.
Since this Foundation, which has a net asset value of € 6.8 billion, triumphantly claims to have distributed € 2.4 billion in 25 years, it is worth noting that Fondazione Roma with net asset value of € 1.5 billion has allocated €900 million and has never used its reserves.