tag:blogger.com,1999:blog-3949752.post5550113884496507574..comments2023-04-29T17:39:27.807+02:00Comments on Italian Economy Watch: Here We Go Time Gets Near With UnicreditUnknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-3949752.post-8084295381394226722009-03-26T10:06:00.000+01:002009-03-26T10:06:00.000+01:00It seems that even I was behind the curve. One of ...It seems that even I was behind the curve. One of the biggest CEE developers (if not the biggest), the Paris-based ORCO SA has effectively failed yesterday.<BR/><BR/>Although the ORCO holding company has "only" entered the French Procedure de Sauvegarde and has not been declared bankrupt yet, the group (which consists of hundreds of companies and has about EUR 2.5 billion of debt) is likely to collapse. <BR/><BR/>At the moment, I do not know exactly which banks are exposed to ORCO, but with all likelihood UniCredit will be among them. <BR/><BR/>So another couple of hundred million may be on its way to the write-off department.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3949752.post-47480368662159696242009-03-20T22:02:00.000+01:002009-03-20T22:02:00.000+01:00I think you guys are missing the point. The issue ...I think you guys are missing the point. The issue underlying "Here we go time..." is that Unicredit's exposure to Eastern Europe is starting to bite. We have barely seen yet what leverage problems that Unicredit has too, so when that starts, Unicredit could be a very dangerous domino to fall. With the Italian government in continuous disarray, and virtually bankrupt itself, this means some very serious consequences. There is nothing here you can spin positively. Although I am Italian, I am the first to admit, that Italian banks are to be highly distrusted, and could start something that could jeopardize all of Europe. Our politicians, and banks, do not give a damn about our country. So why would Czech's, or anyone else support Unicredit, when many Italians don't. <BR/><BR/>Questo รจ una preoccupazione grande.<BR/>E molto grave, molto, molto grave.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3949752.post-81239682331863876342009-03-20T11:09:00.000+01:002009-03-20T11:09:00.000+01:00Hello Edward. Looking at your comment from the Cze...Hello Edward. Looking at your comment from the Czech perspective, I can only say that you are perfectly correct. Some of the Czech banks will start getting major hits in the shape of large corporate defaults sometime during the summer. There will be at least a dozen major developers and construction companies that will fail in the coming months, and Unicredit is likely to be exposed to most of them. I do not think that the Czech Unicredit will fail, they are fairly reasonably capitalised and can bear a lot of strain, but there will be no profits worth mentioning for at least the coming three to four years. The problem with Unicredit (as well as the Czech Raiffeisen) seems to stem from their overexpansion and over-exposure to the real estate business. Unicredit and Raiffeisen came too late and have not been particularly successful in drawing the established clientele from the top three local banks. So they seem to have attracted the higher risk clients, and will now have to bear that risk. <BR/><BR/>As I say, there is no imminent danger of Czech Unicredit collapsing, but there is no hope of them providing any meaningful support to the whole Unicredit structure.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3949752.post-54840562377724670332009-03-19T09:27:00.000+01:002009-03-19T09:27:00.000+01:00Hi,"The news was that fourth-quarter's decline in ...Hi,<BR/><BR/>"The news was that fourth-quarter's decline in profits was less severe than expected. Makes all the difference."<BR/><BR/>Yep, but Hans, this is inpart because the defaults are slower coming in in the East than some expected (but they are and will come in) and to some extent massaging.<BR/><BR/>Spain's banks, if you go by the profits, don't look too bad, that is why people domestically don't understand wht the problem is.<BR/><BR/>The key detail is that Unicredit are applying for a bailout, if things were as rosy as these profits make them appear, then this wouldn't make sense, nor would it be explicable how the Libyan government have suddenly become the main shareholder.<BR/><BR/>Unicredit is, I'm afraid, going to be the make or break issue for the eurozone (IMHO). Either they will bail it out from Brussels in some way, or the thing will start to disintegrate from the edges. The Italian government simply can't fund a nationalisation of Unicredit.<BR/><BR/>"I respectfully disagree. "<BR/><BR/>Of course, that's what blogs are all about.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-3949752.post-68098778369001472252009-03-19T09:10:00.000+01:002009-03-19T09:10:00.000+01:00"Then came the news, again yesterday, that the ban..."Then came the news, again yesterday, that the bank had suffered a 57 percent decline in fourth-quarter profit"<BR/>I respectfully disagree. The news was that fourth-quarter's decline in profits was less severe than expected. Makes all the difference.Hans Suterhttps://www.blogger.com/profile/15643533748766695159noreply@blogger.com