The Board of Directors of BPER Banca S.p.A. ("BPER Banca") approved two important strategic transactions:
Transfer to BPER Banca of all Banco di Sardegna ("BdS") ordinary and preferred shares owned by Fondazione di Sardegna ("FdS") in exchange for 33 million newly issued BPER Banca shares and a convertible subordinated Additional Tier 1 ("AT1") instrument with a nominal value of € 150 million issued by BPER Banca.
Transactions with Unipol Group:
a) acquisition by BPER Banca of 100% of Unipol Banca for a cash consideration of € 220 million;
b) concurrent disposal to Unipol Group of a Bad Loans portfolio of BPER Group with a gross book value of approximately € 1.0 billion (versus a gross amount due of approximately € 1.3 billion).
These transactions will allow BPER Group to increase scale and broaden its customer base, with a view to creating value to its stakeholders, while maintaining a solid regulatory capital position and further accelerating its NPL de-risking strategy.
In particular, the acquisition of BdS minorities will bring to BPER Banca the following benefits:
Significant regulatory capital benefit (with a positive impact on Fully Phased CET1 and Tier 1 ratios of, respectively, +50 bps and +90 bps);
Acceleration of BdS’s cost optimisation process;
Further streamline of BPER Group’s structure.
With regards to the transactions with Unipol Group:
Acquisition of a “clean bank” (thanks to the significant de-risking process undertaken by Unipol Group since 2017);
Increase of BPER Group’s scale, with total assets increasing by around +17% (leading to total assets pro-forma in excess of € 80 billion) and total funding increasing by around +70% (leading to total funding pro-forma close to € 150 billion); broaden client base with more than 500/k new clients with significant scope for cross-selling optimisation and strengthen of distribution network;
Acceleration of de-risking process;
Significant value creation thanks to potential gross synergies in the region of € 85-95 million per annum. These estimates do not take into account:
potential capital synergies (assuming the potential migration of Unipol Banca from standard to internal risk models);
scope for enhancing the current relationship with Unipol Group by extracting further commercial synergies through the development of an innovative approach for the distribution of banking products through Unipol Group's distribution network (so-called "Assurbanking").
Key combined financial impacts from the two transactions:
• Increase of BPER's 2021 earnings per share by +33% ;
• Significant improvement of the Gross NPE ratio from 13.8% (at the end of 2018) to 11.6% pro-forma, broadly in line with the 11.5% target set for end 2020 in the 2018-20 NPE Plan;
• Confirmation of a solid capital position, with a pro-forma consolidated CET1 ratio and Tier 1 ratio Fully Phased estimated at, respectively, 11.4% and 11.8% .