Ital­ian savers bank on post of­fice to sur­vive next cri­sis

Kuwait Times - - BUSINESS -

MI­LAN: Ital­ians worried about the sta­bil­ity of their banks have found a new place to put their money: The state-con­trolled post of­fice. “No­body knows where your money is safe to­day,” says Leonardo Galli, a 58-year-old ac­coun­tant who has re­solved to move all his sav­ings out of his bank to a cur­rent ac­count with Poste Ital­iane, one of many who are de­sert­ing the bank­ing sec­tor.

“Poste Ital­iane is state con­trolled, this is a safe­guard,” he ex­plains. He al­ready chan­nels his salary into a Poste Ital­iane ac­count and pays his bills through a stand­ing or­der made at a post of­fice branch a few steps away from his of­fice. The 154-year-old Poste Ital­iane is win­ning de­posits as fast as some tra­di­tional len­ders are los­ing them, at­tract­ing savers dis­il­lu­sioned with a bank­ing sys­tem that is strain­ing un­der bad debts and ap­pears to be in per­ma­nent cri­sis.

Alarmed by daily me­dia re­ports about fal­ter­ing bank res­cue plans, savers have de­posited about 3 bil­lion eu­ros ($3.4 bil­lion) in the post of­fice in the last six months alone.

Poste, owned 65 per­cent by the state and with a net­work of 13,000 branches, re­ported a 6.5 per­cent jump in de­posits in the first half of this year. They continued to grow in the third quar­ter, a source at Poste Ital­iane said. It is un­clear how much of this money has been taken from the bank­ing sec­tor, but trou­bled len­ders such as Monte dei Paschi di Siena and Banca Carige leaked de­posits at a sim­i­lar rate, around 6 per­cent, in the same pe­riod.

For Galli, from the north­ern town of Como, Poste’s yel­low-and-blue logo rep­re­sents se­cu­rity and sta­bil­ity but it has other ad­van­tages he could not find at his bank. In open­ing an ac­count two years ago, he was at­tracted by Poste’s ex­ten­sive net­work, low costs and of­fices that opened on Satur­day morn­ings. He was also pleased with the re­turn on some in­vest­ments he made re­cently through Poste.

“I have in­vested money in a fund and I earned a yield my bank couldn’t match,” Galli said. He did not want to re­veal the name of the lender, but said it was one of Italy’s ma­jor banks.

A HAVEN OR A RISK?

What many of Poste Ital­iane’s savers do not know is that the post of­fice does not have a bank­ing li­cense, even though it takes de­posits and of­fers loans un­der the brand­name Ban­coPosta. And, in the event of a full­blown fi­nan­cial cri­sis, it may not be the fi­nan­cial haven that some savers be­lieve it to be.

Ban­coPosta does not sub­scribe to Italy’s vol­un­tary fund to insure de­posits, which guar­an­tees savers for up to 100,000 eu­ros de­posited into bank ac­counts. To pro­tect its de­pos­i­tors, it says it has ring-fenced cap­i­tal equal to 1 bil­lion eu­ros and an ex­tra buf­fer of 400 mil­lion eu­ros kept with the state trea­sury.

Un­der a pres­i­den­tial de­cree, Ban­coPosta can take de­posits pro­vided they are in­vested in euro­zone sov­er­eign bonds, but the post of­fice’s de­posit-tak­ing arm has cho­sen to in­vest al­most en­tirely in Ital­ian debt, at roughly 40 bil­lion eu­ros. In to­tal, Poste Ital­iane has more than 60 per­cent of its as­sets tied up in Ital­ian gov­ern­ment debt, in­clud­ing an­other nearly 80 bil­lion eu­ros held un­der the group’s in­sur­ance arm. By con­trast, Italy’s best-cap­i­tal­ized ma­jor bank, In­tesa San­paolo, in­vests 12.8 per­cent of its as­sets in Ital­ian state debt, in­clud­ing bonds held by its in­sur­ance arm.

Some an­a­lysts say Poste Ital­iane’s large ex­po­sure to the state could in­crease if the group’s bid to buy an Ital­ian fund man­ager, Pioneer In­vest­ments, is suc­cess­ful. Pioneer, cur­rently held by Italy’s largest lender UniCredit , has a size­able ex­po­sure to Ital­ian debt be­ing one the coun­try’s big­gest as­set man­agers. — Reuters

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