|Bid||12.40 x 0|
|Ask||12.48 x 0|
|Day's Range||12.33 - 12.52|
|52 Week Range||9.07 - 13.07|
|Beta (3Y Monthly)||1.82|
|PE Ratio (TTM)||7.30|
|Earnings Date||Feb 5, 2020 - Feb 10, 2020|
|Forward Dividend & Yield||0.27 (2.18%)|
|1y Target Est||16.38|
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Germany is set to knock the U.K. off its perch as Europe’s most active property market, as yield-hungry investors bet the region’s traditional growth engine will bounce back from its current economic malaise.Investors poured 49.4 billion euros ($54.4 billion) into German commercial real estate in the 10 months through October, surpassing the 35.1 billion euros of deals in the U.K., according to broker Savills Plc. That puts Germany on course to best Britain this year for the first time in a decade.The German property market is booming despite its economy narrowly averting a recession in the third quarter. Buyers desperate for returns in a world of negative interest rates and feeble bond yields are increasingly willing to look past harrowing economic forecasts and snap up buildings with the potential for rising rental income.“At the moment the demand is strong, but all the surveys predict that German economic growth is slowing,” said Gert Waltenbauer, chief executive officer of KGAL GmbH & Co., an asset manager that invests in real estate, infrastructure and aviation. “We don’t have the feeling we should be really worried; we have to take a long-term view.”Read more: Germany Dodges Recession With Surprise Third-Quarter GrowthThe U.K., led by London, has long been the commercial real estate capital of Europe, attracting the lion’s share of international investment. But deals have fallen off amid the political turmoil and uncertainty surrounding Britain’s exit from the European Union. That has helped make Germany, with its relative political stability, economic heft and liquid market, a more attractive bet.Marcus Lemli, CEO of Savills’s German operation, said Brexit alone can’t be blamed for Britain falling behind. Germany’s economic fundamentals are what lure investors from around the world. And a limited supply of available buildings is making competition for assets increasingly fierce.“In Germany, construction is unable to keep up with demand in almost all major cities, particularly in the offices sector,” Lemli said. “The amount of capital trying to find a home in property is much larger than the available stock.”A case in point is the recent acquisition of a 49-property portfolio in Germany by Commerz Real for about 2.5 billion euros. The real estate arm of Commerzbank AG beat out more than half a dozen rivals to complete the deal, which had a yield of about 3%, based on current annual rental income from the properties and the sale price, according to people with knowledge of the matter who asked not to be identified because the sales process is private.‘Long-term Play’That’s an extremely low yield for a large German portfolio. Still, the deal made sense because the price per square meter worked out at about 8,000 euros, more than a third less than you’d pay for top buildings in Berlin, Frankfurt and Munich, according to Commerz Real CEO Andreas Muschter.That suggests Commerz Real has room to raise rents and boost returns for its investors, he said -- as long as demand for office space remains strong. Given Germany’s economic malaise, that’s a bold bet. “Pricing was aggressive, but it’s a long-term play and we’ll have the next 10 years to manage it to a higher level,” Muschter said in an interview. “That’s why you had so many parties going for it.”The intense competition for the portfolio -- unsuccessful offers totaled about 20 billion euros -- highlights the strength of demand for a limited supply of deals in Germany, the people said.Pending DealsThat capital that still needs to be invested, and deals are in the works. In Munich, Norway’s sovereign wealth fund is pushing forward the sale of a 400 million-euro office building, and an office campus owned by UniCredit SpA’s German subsidiary HVB is in the process of being sold for about 1 billion euros, according to people with knowledge of those deals.“We do not comment on rumors and speculation,” a spokeswoman for HVB said by email. A representative of the Norwegian sovereign wealth fund declined to comment.“We can discuss pricing forever, but our clients are giving us money and our job is to get the performance with the money they give us,” said Paul Joubert, managing director for European transactions at Invesco Real Estate. “Yields are going to go down for sure. All the institutions have the same problem.”(Updates with HVB comment in penultimate paragraph.)To contact the reporter on this story: Jack Sidders in London at email@example.comTo contact the editors responsible for this story: Shelley Robinson at firstname.lastname@example.org, Patrick Henry, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Leonardo Del Vecchio’s sudden emergence as the biggest shareholder of Mediobanca SpA, Italy’s best-known investment bank, is fueling speculation of an even bigger shakeup in the country’s financial industry. The lender’s promise to pursue cautious growth looks vulnerable to a push for deeper change.Exactly what the eyewear billionaire has in mind for his 10% stake isn’t yet clear. Media reports suggest the 84-year-old Italian wants to lift his holding to as much as 20%, a huge undertaking — and not just financially. Considerable effort would be needed to obtain European Central Bank approval to own more than 10%. Del Vecchio must have grand ambitions.What’s more, the tycoon is not the best of friends with Mediobanca’s chief executive officer Alberto Nagel. The two have been at odds since a proposed investment by Del Vecchio in a Milan hospital was reportedly blocked by Nagel.Del Vecchio's recent comments appear critical of the Mediobanca boss. He hit a nerve by suggesting the bank might do better by expanding more aggressively in investment banking and relying less on income from its consumer finance business and its holding in the giant insurer Assicurazioni Generali SpA.UniCredit SpA, Italy’s biggest bank, could previously call the shots at Mediobanca before selling its own holding in the bank last week. That position let it wield influence over Generali too. Now the question is what Del Vecchio wants to do with the stake. He has also acquired a holding in Generali directly.While investors are right to fret about the peculiarities of Italian corporate governance, where minority shareholders can control the boardroom for their own interests, as a smart outsider Del Vecchio has spurred a useful debate. Mediobanca said on Tuesday that it wants to keep its 13% Generali stake until it finds an acquisition in wealth management that it needs to fund, and that he feels an obligation to keep it in Italian hands. But is it really a must have?At 4 billion euros ($4.4 billion), the value of the holding is far larger than what the bank might need for a rainy day. Proceeds from a sale could accelerate investment in more promising businesses such as private banking to generate higher returns — or they could be given back to shareholders. Or Nagel could do a bit of both. Under his four-year growth plan, Mediobanca sees returns on allocated capital in wealth management of 25% compared to 11% from Generali. Maybe it does make sense to shift more capital to the former.In fairness, that four-year strategy unveiled by Nagel this week should let the company build on its success in investment banking, consumer finance and wealth management. Mediobanca expects to bolster profitability to an 11% return on tangible equity from 10% and to boost investor payouts by 50% over the four years. Against a backdrop of Italian banks plagued by bad debt and an industry in Europe that’s mostly shrinking, Nagel deserves credit for dodging risky loans and focusing on the right businesses.Overall, Nagel is counting on average revenue growth of 4% and doubling the contribution to profit from wealth management by growing organically. But he’s still relying on returns from Generali too: The stake contributes one-third of income.It’s possible that Del Vecchio, who wields huge power at the eyewear giant EssilorLuxottica SA, will grow frustrated with the complications of investing in finance. Regulation has kept activist investors away from banking mostly. Even if he doesn’t stick around, Nagel may find his plans need to change.To contact the author of this story: Elisa Martinuzzi at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of UniCredit Bank AG and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
Rating Action: Moody's assigns definitive rating to Impresa TWO S.r.l. Milan, November 11, 2019 -- Moody's Investors Service ("Moody's") has today assigned the following rating to the debts issued by Impresa TWO S.r.l. Moody's has not assigned any ratings to the EUR 3,319,908,880.00 Class B Asset Backed Fixed Rate and Variable Return Notes due December 2061.
(Bloomberg Opinion) -- European fund management companies spent 2018 watching their share prices steadily decline, battered by increased regulatory scrutiny, customers withdrawing money and the relentless squeezing of fees. They’ve rallied this year, but the industry’s biggest beast in the region is outpacing its peers by an astonishing margin.Investors in Amundi SA have enjoyed a total return of more than 60% in 2019, outpacing the Stoxx Europe 600 index by 35 percentage points. The stock has beaten the 32% gains at DWS Group GmbH and Standard Life Aberdeen Plc, the 39% return for Schroders Plc and Man Group Plc’s 19% rise.Amundi, 68 percent-owned by France’s Credit Agricole SA, recently announced record quarterly inflows of almost 43 billion euros ($48 billion) in the three months through September, breaking a streak of three consecutive quarters of client withdrawals. Its 1.6 trillion euros of assets under management — up from 952 billion euros when it listed on the stock market in November 2015 — make it Europe’s biggest money manager.The most impressive statistic, however, is the one element of Amundi’s financials over which it has most control: its costs.The company’s frugality has nudged its cost-to-income ratio lower in recent years; it fell to an industry-beating 51.1% at the end of the third quarter. By comparison, Deutsche Bank AG-controlled DWS aims to cut its ratio to 65% and doesn’t expect to achieve that until the end of 2021.What could knock Amundi off its perch? Well, DWS Chief Executive Officer Asoka Woehrmann told the Financial Times this month that he plans to challenge his rival’s dominance by finding a takeover or merger that would increase his firm’s 752 billion euros of assets. Earlier this year Switzerland’s UBS Group AG was reported to be considering strapping its fund management arm to DWS. Insurer Allianz SE was also said to be interested in the German investment firm. Any such deal would create a challenger with the scale to match Amundi.But the French fund giant’s CEO Yves Perrier is unlikely to just stand by if industry consolidation begins. Now that he’s finished absorbing Pioneer Investments, a fund management unit bought from Italy’s UniCredit SpA for 3.5 billion euros in 2017, the decks are clear. While these mega-mergers might not happen, Amundi is well placed if they do. With its shares trading at their highest in more than 18 months, Perrier has the currency to fund a deal.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- A bond-market warning light that glowed green for years is suddenly flashing red. The bad news for bondholders is that the last time this happened, it was accompanied by the biggest sell-off since the aftermath of the global financial crisis.That indicator is the term premium, which, for both Treasuries and German bunds, has snapped back from last quarter’s record lows. The U.S. gauge is now on track for the biggest three-month increase since late 2016.After a stellar rally through August, global bonds have pulled back in recent weeks as thawing trade tensions lightened the global economic gloom, sapping demand for the safety of sovereign debt. Rebounding term premiums now signal the sell-off has further to run -- the measure of extra compensation for holding longer-term debt versus simply rolling over a short-tenor security for years is in an uptrend that investors and strategists say has only just begun.The 10-year Treasury yield, a benchmark for world markets, climbed Thursday to a three-month high as investors’ animal spirits were sparked by the ebbing of the biggest headwind to global growth -- the U.S.-China trade war. That came as its German counterpart surged to levels unseen since mid-July and those in France and Belgium climbed back above 0%. The Japanese equivalent jumped Friday to its highest since May.Investor are increasingly worried about holding longer-term debt as easing economic anxiety raises the prospect of a capital flight out of haven assets into riskier ones. Such a trend is already driving up yields, which, combined with the Federal Reserve’s signal that it will hold interest rates steady for the time being, is boosting term premiums. In Europe, a still-accommodative policy is bolstering inflation prospects, adding to the upward pressure on the gauge.“Term premium was extremely depressed due to trade uncertainty, Brexit and you name it,” said Roberto Perli, a partner at Cornerstone Macro LLC. “These risks have abated so there is room for about a 50 basis point move higher in term premium. And given the Federal Reserve is on hold -- with no chance of lifting rates - there’s a lot of incentive for investors to take risk.”Ten-year Treasury term premium has climbed about 42 basis points since the end of August, on track for the biggest three-month increase since 2016, according to the widely followed New York Fed ACM model created by Tobias Adrian, Richard Crump and Emanuel Moench. It rebounded this week to as little as minus 0.84% -- from a record low of minus 1.29% in August, the least for NY Fed data provided back back through 1961.Understanding the trend in term premium isn’t just an academic exercise for bond wonks as it also helps gauge what’s driving debt yields and valuations. That margin of safety is one of three components that make up the yield of any given bond, according to former Fed Chairman Ben S. Bernanke -- the other two being market expectations for monetary policy and inflation. Basically, it’s an extra cushion against risk over the security’s relatively long lifetime.To be sure, a resolution to the U.S.-China trade spat still looks far, with President Donald Trump downplaying Friday the amount of progress made in negotiations.In Germany, the 10-year term premium began a swoon in mid-2014 after ranging from 100 to 250 basis points back since the euro was introduced in 1999, according to estimates by UniCredit SpA strategist Luca Cazzulani, using the methods as in the ACM model.The gauge for bunds slumped to a record minus 100 basis points at the end of September before rising to minus 88 in October, according to UniCredit data updated at the end of each month. It has likely risen further this month.“We have seen a continuation of upward in bund yields this month, and that should be related mostly to higher term premium,” Cazzulani said.Long-term debt has a higher duration that those with shorter tenors. That means that for each move up in yield, prices will fall more sharply than for its short-term counterparts, increasing the risk of being in long-maturity debt.QE EffectThe European Central Bank’s resumption of fresh bond purchases this month will exert marginal downward pressure on bund term premium, yet won’t be “a game changer,” according to Cazzulani. He estimates that quantitative easing will cause only a five basis point setback in the gauge, which would be too little to counter forces pushing it upward.After cutting rates and unveiling debt-buying plans last month, the ECB has been pushing for governments to add budgetary support for growth. The prospects of fiscal stimulus along with an ongoing push for more European banking integration bode for more upside for term premium and yields in the region, according to Ronald van Steenweghen, a fund manager at a portfolio manager at DPAM.“Term premium was driven to levels that were difficult to explain unless you think the economic outlook is very dire, which we don’t agree with,” DPAM’s van Steenweghen said during an interview at the firm’s Brussels office. “And the potential positive feedback loop on the economy of fiscal stimulus is very, very high. This, with stable ECB policy, improving growth and reduced uncertainty all will work to push yields higher.”The 10-year bund yield is on course to rise from about minus 0.26% to between 0.50% and 1% over the next one to three years, predicted van Steenweghen.That leaves him “more confident with having a shorter duration stance.”To contact the reporter on this story: Liz Capo McCormick in london at email@example.comTo contact the editors responsible for this story: Paul Dobson at firstname.lastname@example.org, Anil Varma, Debarati RoyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Dear readers, Perfection is overrated. To learn new things, we must sometimes fail. But how much failure is too much? The answer, scientists announced this week, is to succeed 85 per cent of the time. ...
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Commerzbank AG downgraded its full-year profit outlook, marking a second retreat in weeks by Chief Executive Officer Martin Zielke after the European Central Bank took rates deeper into negative territory.The bank said net income for this year will now probably be lower than in 2018, down from the lender’s target of a slight increase, after the ECB cut the deposit rate to minus 0.5% and because of higher taxes. While the more pessimistic outlook comes after the lender abandoned its ambitions of increasing revenue this year, Commerzbank did join lenders including Societe Generale and UniCredit SpA boosting its capital buffers in the third quarter.European banks are struggling with the impact of negative rates on lending income and a worsening economic environment. German finance minister Olaf Scholz on Wednesday reopened the debate on consolidation as a potential solution to the continent’s banking ills with proposals to break the deadlock on banking union -- seen by many executives as necessary before deals can take place.Commerzbank shares gained as much as 2.6% in early Frankfurt trading, before paring gains to rise 1.1% as of 9:07 a.m.Several top investors and regulators have privately expressed skepticism about the latest turnaround plan, people familiar with the matter have said. In addition to promising to reduce the workforce by over 2,000, Zielke has also said he’s selling one of the company’s strongest profit engines, its Polish subsidiary mBank, while saying profitability will remain well below that of the competition for at least the next four years.“The further monetary policy easing announced by the European Central Bank in September and the resulting pressure on margins will have a negative impact on earnings,” Commerzbank said in its earnings statement, adding that it expects a “significantly higher tax rate in the fourth quarter.”The bank is grappling with strategy after talks to create a merger with German rival Deutsche Bank AG fell through earlier this year. Germany had been interested to create a large domestic-focused lender to ensure credit to its export-oriented economy during a downturn, but Deutsche Bank CEO Christian Sewing balked at the execution risks of a deal.Commerzbank last week released preliminary results for the third quarter showing net income jumped 35% in the period as risk provisions and other costs declined. The bank also sold a unit in the quarter, accounting for one-off revenue of 103 million euros ($114 million).Corporate ClientsThe corporate clients division, which has long been a particularly sore spot, continued to show a weak performance as revenue fell for a fifth consecutive quarter. The current division head Michael Reuther, will be succeeded in January by former ING Groep NV executive Roland Boekhout. The bank is also seeing more change in the board, with Chief Financial Officer Stephan Engels set to join Danske Bank A/S.Though the lender’s other core division, the one catering to retail clients, posted revenue growth, most of that came from the Polish subsidiary it’s now seeking to sell. By contrast, the German retail unit, which is the division’s biggest source of revenue by far, contracted 6%. The bank has said it’s shifting its focus from rapid client acquisition to getting existing clients to spend more money on banking services.As part of the September revamp, the lender also decided to scrap its previous promise -- and a major element of its previous marketing campaign -- to keep a network of about 1,000 branches in Germany. The retail division under Michael Mandel said it’s going to close about a fifth of those.(Adds failed merger talks with Deutsche Bank in sixth paragraph.)To contact the reporter on this story: Steven Arons in Frankfurt at email@example.comTo contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org, Ross LarsenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
from the US-China trade war to dump negative-yielding debt. In the US, the benchmark 10-year Treasury yield climbed 12 basis points to 1.94 per cent, its highest level in three months. The sell-off in government debt came as fears of a global slowdown ebbed after a Chinese commerce ministry spokesperson suggested a pause in Beijing’s trade war with the US might be at hand.
Net interest income — the difference between what lenders earn from loans and pay for deposits, and a key profit driver for retail banks — fell 5% to EUR2.56 billion.
Slovenia's gross domestic product (GDP) growth is expected to lose less than 0.1 percentage point due to new loan restrictions, the Bank of Slovenia governor said on Wednesday. Bostjan Vasle, who also sits on the European Central Bank (ECB) governing council, told reporters household spending growth could fall by about 0.1 percentage point due to the rules while GDP on aggregate would be influenced by less than that.
The party of the Slovenia's centre-left Prime Minister Marjan Sarec asked the Bank of Slovenia on Monday to reverse restrictions on bank loans imposed this month, saying the policy will hurt many citizens. The central bank has ordered banks to halt lending if a borrower would have to pay more than 67% of net income to service debt, and has imposed a maximum seven-year maturity for consumer loans other than mortgages. It says the restrictions are necessary to curb excessive credit growth, with consumer lending rising faster than 10% per year.
While the total of assets under management in environmental, social and governance (ESG) funds is still small, the category has become an increasingly popular smart beta strategies. ESG assets under management have grown the fastest among smart beta strategies, at a compound annual growth rate of more than 70 per cent over the past five years, according to a recent report from Bank of America Merrill Lynch.
Rating Action: Moody's affirms all of UniCredit's ratings. Global Credit Research- 23 Oct 2019. Action reflects the bank's ability to withstand a weaker operating environment in Germany.
Moody's has not assigned a rating to the EUR 30,000,000 Class J Asset Backed Variable Return Notes due November 2039, which are also issued at the closing of the transaction. The assets supporting the Notes are residential mortgage loans with a gross claim amount of around EUR 6 billion as of the cut-off date, October 1st, 2019.
Rating Action: Moody's assigns definitive ratings to Italian ABS Notes backed by NPLs issued by PRISMA S.r.l. Global Credit Research- 18 Oct 2019. EUR 1,290 billion Notes rated, relating to a portfolio ...
(Bloomberg Opinion) -- Italy’s second-richest tycoon made his fortune in spectacles, and now he has ideas about how to run a bank. There is no doubting Leonardo Del Vecchio’s entrepreneurial flair. But his decision to take a 7% stake in Mediobanca SpA and opine publicly about its strategy merits caution. He is but one shareholder, and he should not dictate the lender’s strategy.Del Vecchio is not a naturally passive shareholder or owner. Chief executive officers at his glasses maker Luxottica Group SpA would rotate at an alarming pace. The merger of Luxottica with French lenses group Essilor diluted his dominant holding into a non-controlling stake and created a balanced board with representation from both sides. The arrangement soon fell into acrimony. That is an inauspicious backdrop for a large and potentially growing investment in Mediobanca.His motivations are unclear. The benign explanation is that this is portfolio diversification: Most of Del Vecchio’s wealth is tied up in the eyewear industry. He has some financial exposure to Italian insurer Assicurazioni Generali SpA and lender UniCredit SpA, but this is relatively small. The more worrying possibility is that it really is about meddling with another Generali shareholder — Mediobanca owns 13% of the insurer — or that it relates to some other personal agenda.Del Vecchio has reportedly said Mediobanca needs to be more ambitious in mergers and acquisitions, expand in investment banking, and rely less on the income it receives from Generali. It is not obvious all of these ideas would benefit other shareholders. Wealth management is where acquisitions might make sense for Mediobanca, but deals are risky given that the main assets — the people — can walk out of the door. Mediobanca CEO Alberto Nagel has been rightly cautious.Lifting exposure to investment banking activities, reviving a former strategy, would re-introduce more volatile revenue streams and risk lowering the multiple of earnings on which the shares trade.The function of the Generali stake is a trickier question. Corporate finance theory would dictate that Mediobanca should sell it and return cash to shareholders. If the bank needed cash in the future, it would then ask shareholders to stump up when it could show what the funds would be used for.That works for big, diversified corporations like Unilever NV. But a smaller, less well-capitalized, Italy-focused bank would probably find the capital markets unwilling to provide funds just when it needed them most — for example, in hard times when bid targets were most affordable. So long as there is a possibility that Mediobanca might want to do M&A, the stake is best seen as a financial resource to be retained.It’s possible that Del Vecchio’s vision and Nagel’s could align if Mediobanca finds a decent takeover target, which the Generali stake could pay for. But while Mediobanca’s existing strategy looks sound, and the group is well run, Nagel cannot be complacent. The Generali stake makes a big contribution to net income but doesn’t require any management effort. And Mediobanca’s central and treasury functions make an uncomfortably high dent in the profits that the other businesses bring in. An upcoming strategy refresh offers the chance for Nagel to set some hard targets for revenue growth and further cost efficiency that would dispel any suggestion of low ambition.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Slovenia's central bank said on Wednesday it will impose restrictions on consumer loans to curb "excessive" credit growth and protect borrowers from becoming overindebted. Slovenia narrowly escaped having to ask for an international bailout for its banking sector in 2013 but since then, lenders have returned to profit and reduced their pile of bad loans. Primoz Dolenc, deputy governor of the Bank of Slovenia, told a news conference that annual growth of consumer loans currently exceeds 10%, well above economic growth of 4.1% in 2018.