Last
January “Cassa di Risparmio di Verona – Vicenza – Belluno e Ancona Banca
S.p.A”, or shortly “Cariverona”, sent its customers a newsletter formed
by a four-page folder bearing the logos “Shareholder Customer” and the
subtitle “Information for the members”.
The folder's first page
highlighted the positive trend of the management with a justified and legitimate
pride.
The achieved increase percentages,
however, are not completely considerable because they refer to different
realities. In 1997, in fact, it was specified that “the increase of the
turnover and of the market shares was favoured by an expansion plan of
the distribution network of about fifty (editor's note: !?!) branches that
strengthened Cariverona's presence both in historical and new areas”.
If one considers that “at
the end of 1996 (editor's note: one year before!) the corporate distribution
network had 378 branches including London's” and that “over the year (1996)
the increase was equal to 33 branches”, one infers that the 1997 results
benefited from the total support of the 33 branches that were opened in
1996 as well as from those fifty opened in 1997.
Eighty new branches, with
respect to the initial 345 (at the end of 1995), account for an over 24%
increase. 24% more of branches with respect to the 8,44% increase of deposits
and savings, +12,6% of investments, 9,95% of the globally intermediated
savings. The operating results can be summed up in a modest increase of
the net profit (in June) equal to 2,58%.
If the bank intends to inform
(as it must or, it would be better to say, as it should) its shareholders
(and not just them), its comparisons must be made in a homogeneous way.
In other words the bank should communicate the increase, if any, in deposits,
savings and investments of the 345 branches operating at the end of the
1995 business year and those of the branches operating at the end
of 1996. It should say, in other words, to what extent the increase achieved
(actually not exceptional) derives from the new branches' support and what
from a better productivity of the already existing system.
The question is far from
being trivial and its relevance, then, does not require any further explanations.
We hope that (or maybe we
are just deceiving ourselves) the Report that the Board will prepare for
the Meeting on the 1997 Balance will provide all the necessary information
concerning this issue.
The topic was completely
overlooked in the Report of the 1996 Balance, unfortunately.
The “vice” of communicating
as little as possible is also confirmed by the fact that Cariverona does
not prepare a “Half-yearly Report”. We are sorry to remark the reason for
such scant information. The bank's Board – we were told – does not do it
because it is not laid down by the law.
Unfortunately, there are
still those who – as Cariverona's Board – believe that information for
shareholders is not a duty but just an obligation to be fulfilled only
if laid down by the law. The accounts related to one year of the bank's
activity, then, will just be known with the Report and the Balance of the
business year. Thus, documents and records (we wish we were wrong) will
rigorously comply with what is laid down by the law, just as it happened
in the past. And not another word will be said on this!
These convictions and behaviour
make us laugh (bitterly!) when we read how the bank fawns on the minority
shareholders.
From the “Shareholder Customer”
folder:
“The positive trend of the
Cariverona's securities quotation continued to be such also in the past
few months, and it also exceeded 28,000 lira. This is a considerable performance
to be compared with the 19,000 lira that was the figure when, three years
ago, the bank's corporate capital was opened to private shareholders. (…):
today Cariverona's private shareholders are over 32,500, accounting for
an overall share that, at the end of October, was equal to 16,75% of the
capital”.
The above-mentioned “Shareholder
– Customer” folder precisely and emphatically states, then, that the quotation
of the security rose from 19,000 to 28,000 lira in three years and that
private shareholders currently own 16,75% of the capital.
As far as the quotation
is concerned, it must be underscored that the Italian Stock Exchange had
an average increase far higher than the reported figure during the three-year
period considered. Only in 1997 the figure was plus 57,9%. Cariverona's
security, then, was nothing but mediocre.
Furthermore, the yield equal
to 630 lira per share is lower than 2,5% gross of fiscal charges. Profitability
is certainly not outstanding!
The fact that the policies
of the Board and of the Foundation (that controls the Banca S.p.A) are
still anchored to the “patrimonial tendency” axiom rather than to shareholders'
returns, is highlighted by the distribution of the 1996 operating profit
that was used to give 121 billion lira to the extraordinary reserve fund!
A widely higher amount with respect to the 112 billion lira for the yield
on capital (dividends).
The placing of Unicredito's
shares is just about to take place. Unicredito is the holding that connects
the savings banks of Turin, Verona, Marca Trevigliana and Trieste. Fondazione
Cassa di Verona currently controls Unicredito's 43,85% and Unicredito,
in turn, owns 83,6% of Cariverona Banca S.p.A. The placing should be made
with a public offer for sale in 1998. It will surely be successful. Just
like some other recent placing of companies whose securities quotations'
trend is inversely proportional to the economic results and/or to profitability.
Ladies and gentlemen shareholders,
at Cariverona, as in many other banks, move on… there's still space!
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