The Italian Minister of Economy and Finance, on the proposal of the Bank of Italy, ordered the compulsory administrative liquidation of Aigis Banca spa on Saturday 22 May (see here the press release), the fintech bank born following the transformation process of GBM Banca, which began at the end of January 2017, when the bank had left a previous procedure of extraordinary administration, following the acquisition by Metric Capital Partners (see a previous article by BeBeez). The liquidators appointed by the Bank of Italy are Francesco De Santis, as liquidator, and Andrea Di Cesare, Maria Rita Schiera and Alessandro Zanotti, as members of the Supervisory Committee.
The new role of GBM Banca and the new name had been presented to the press only a few months ago, last December 2020 (see a previous article by BeBeez). The mission of Aigis Banca was to offer synthesis services between fintech and bank, supported by the use of technologies based on automation and artificial intelligence (AI), to ensure rapid response times for entrepreneurs who intend to apply for financing and factoring. Aigis Banca also raised consumer savings through deposit accounts and current accounts remunerated at a rate of 0.5% and at zero expenses (if the minimum balance is 3,000 euros and they are credited to the utilities / salary / pension account).
But Aigis Banca’s mistake was to significantly expand its business in Germany (last December it announced that it had 15,000 customers, of which 10,000 in Germany) and to expose itself to Greensill Bank AG, a German subsidiary of London-based Greensill Capital, founded in 2011 by the Australian Lex Greensill, a former banker in Citigroup and Morgan Stanley, which has been until recently a so-called unicorn scaleup, one of the main reverse factoring operators globally (see a previous article by BeBeez).
In fact, last March, Greensill Capital filed for receveirship due to the non-renewal of insurance guarantees on 4.6 billion dollars of loans by the Bond and Credit Company (Tokyo Marine), opening a Pandora’s box that caused an uproar in Credit Suisse, whose funds were buying billions of dollars of securitized corporate loans from Greensill, and which will result in a hefty write-off for Greensill’s top investors, namely General Atlantic and Softbank’s VIsion Fund (see here MF Milano Finanza). Shortly thereafter, Greensill’s German subsidiary also filed an application for receveirship, with a contagion effect that spread to various banks, including Aigis Banca, which, however, did not have shoulders broad enough to absorb the blow.
In order to protect the rights of depositors and customers of Aigis Banca, the liquidator proceeded, with effect from Sunday 23 May, to the transfer of corporate assets and liabilities to Milan-listed Banca Ifis, which took over the transferor’s relations with customers without solution of continuity (see here the press release by Banca Ifis). Customers and depositors therefore are not suffering any consequences from this step: the bank’s offices, branches and electronic channels operate regularly; all banking operations can be carried out and are not interrupted.
The intervention plan was implemented with the support of the Interbank Deposit Protection Fund (FITD). The symbolic price paid by Banca Ifis, equal to one euro, together with the intervention of the FITD, for a total of 48.8 million euro, and the terms of the contract guarantee the absence of material impacts on the capital ratios (CET1) , asset quality and on the income statement of the Banca Ifis Group.
Frederik Geertman, ceo of Banca Ifis, explained: “The intervention of Banca Ifis makes it possible to avoid the serious social and economic consequences caused by the situation that has arisen in Aigis Banca, as a consequence of the latter’s exposure to Greensill. Bank AG, in insolvency proceedings from March 2021. The intervention of Banca Ifis will take place protecting the savings of retail customers, guaranteeing the continuity of loans to businesses and safeguarding the employment of the people who work there. Aigis Banca is focused on credit to small and medium-sized enterprises and collects through remunerated current accounts and deposit accounts. The similarity with the activities of Banca Ifis will allow us to effectively manage the integration process “.
The scope of acquisition by Banca Ifis mainly regards loans to small and medium-sized enterprises for medium / long-term loans backed by public guarantees and factoring (298 million euros), government and Cassa Depositi e Prestiti securities (135 million euros) , deposits, including those of retail customers (440 millions), as well as the related personnel present at the Milan, Rome and Bari offices.
The following are excluded from the acquisition perimeter: securities linked to Greensill Bank AG in insolvency, tax assets, the subordinated bond loan issued by Aigis Banca, as well as some other legal relationships considered non-functional to the transaction.
The assets included in the business branch subject to acquisition are equal to approximately 5% of the total assets of the Banca Ifis group as of March 31, 2021, for RWA correspondents in the order of 100 million euros.
The history of Aigis Banca is rather troubled. Before being acquired by Metric Capital, the Mediterranean Banking Group (GBM) was a regional commercial bank historically focused on traditional credit to local small and medium-sized enterprises, which entered extraordinary administration in October 2015, after an investment of approximately 40 million euros to acquire the former Banca Federiciana di Andria, in Apulia, which was followed by a period of continuous losses and capital erosion, until the Bank of Italy had established the commissioner and the search for investors who would take it over and thus avoiding the compulsory liquidation of the institute.
In January 2017 MCP Private Capital Fund II, through the subsidiary MCP Investment II sarl, managed by Metric Capital, had acquired 75.36% of the bank’s capital in partnership with Nicola Bonito Oliva (former manager of Dresdner Bnak Italia) and Filippo Cortesi (one of the first managers in Milan-listed Banca Sistema), at the helm of Wave Securities, arranger of the transaction, which had in turn invested 21.43% through their November UK Ltd. The acquisition price was 7 million euros and at the same time the bank it had been recapitalized for 20 million, with the aim of strategically repositioning it as a new generation credit institution. Hence the new name of Aigis Banca.
