Will Europe regret stringing out the Carige debacle?

The European Central Bank is giving Banca Carige yet more time to boost its capital. If the lender cannot turn itself around, authorities will regret dithering while the private sector walked away.

  • By Jasper Cox
  • 03 Jan 2019
Email a colleague
Request a PDF

On December 22, Carige’s shareholders blocked a plan to raise equity, throwing the bank’s already shaky prospects further into doubt.

Then on Wednesday, with a majority of the board throwing in the towel, the ECB appointed the freshly resigned CEO and chair to continue to run the bank and try once more to strengthen capital.

The ECB is still willing to give Carige the benefit of the doubt, despite the repeated failure of attempts to access the market and the merry-go-round of board members who join, disagree with the shareholders, and leave.

That patience has not been shared by anyone in the private sector who could actually save Carige. Investors, aside from other Italian banks, have refused to put in new capital. And those banks have so far refused to merge with Carige, seen as the ultimate aim.

An eventual resolution or liquidation looks more and more likely. In that scenario, a knight in shining armour will be harder to find than it would have been several months ago.

Last week the bank paid back subordinated bondholders, who might expect to lose out if the bank goes under, upon maturity of their notes: another €135m taken off the table.

The ECB’s manoeuvre this week is called an “early intervention” under the bank resolution and recovery framework.

But what sort of intervention is allowing Carige to pursue the same old failing strategy. And by what possible definition is this early?

  • By Jasper Cox
  • 03 Jan 2019

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 192,079.22 851 8.17%
2 Citi 181,567.62 744 7.72%
3 Bank of America Merrill Lynch 152,466.12 623 6.48%
4 Barclays 142,653.63 569 6.06%
5 HSBC 120,106.34 625 5.11%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Credit Agricole CIB 21,924.17 77 8.15%
2 BNP Paribas 19,758.95 84 7.35%
3 Bank of America Merrill Lynch 17,751.88 49 6.60%
4 Deutsche Bank 12,953.29 48 4.82%
5 UniCredit 12,630.44 68 4.70%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Morgan Stanley 6,404.49 28 10.24%
2 JPMorgan 5,949.53 36 9.51%
3 Goldman Sachs 5,596.92 27 8.95%
4 UBS 4,138.47 20 6.62%
5 Citi 4,111.21 29 6.57%