Veneto Banca

Veneto Banca S.p.A. was a former Italian banking group headquartered in Montebelluna, in the Veneto region. Its origins dated to 1877, when it was established as Banca Popolare di Montebelluna. For much of its history it operated as a cooperative bank, building a regional presence through the acquisition and integration of local cooperative banks and savings institutions. From the 1960s onward, and particularly from 2000, the institution pursued a more ambitious expansion strategy across north-western and southern Italy and into parts of Eastern Europe. The group broadened its domestic network through transactions involving banks such as Banca Popolare di Intra, Banca Meridiana, Banca Apulia and Cassa di Risparmio di Fabriano e Cupramontana. In 2001 and 2002 it acquired 29 branches of Nuova Banca Mediterranea from Banca di Roma and transferred them to Banca Meridiana, which was later merged with Banca Apulia. The group also developed specialist and investment-banking interests, including Banca Intermobiliare and Eximbank. By the middle of the 2010s, Veneto Banca was one of Italy's fourteen largest banks under direct supervision by the European Central Bank and ranked sixteenth nationally by total assets on 2015 figures. The bank's later history was dominated by capital pressure, deteriorating loan quality and governance problems. Italian banking reform legislation required large cooperative people's banks to convert into joint-stock companies. Veneto Banca completed this demutualization in December 2015, changing from a cooperative limited company structure to a Società per Azioni. The conversion altered voting arrangements and required the institution to repurchase a substantial quantity of shares. The bank then planned a capital increase of approximately €1 billion and sought a stock-market listing in 2016, partly because its capital ratios were close to regulatory minimums. The planned offering failed. Demand from institutional investors was extremely limited, while existing shareholders subscribed for only a small portion of the issue. Atlante, a banking-sector rescue fund created on a voluntary basis, ultimately subscribed most of the capital increase and became the dominant shareholder. Although the transaction temporarily strengthened Veneto Banca's reported capital position, the improvement was undermined by further write-downs of non-performing loans and by continuing supervisory requirements. Atlante provided additional support, but later stated that it had exhausted its capacity to invest and that major banks backing the fund were unwilling to contribute further. Veneto Banca also faced allegations that its own shares had been sold improperly to depositors and retail customers. In January 2017 it offered to repurchase shares sold between 2007 and 2016 at a fraction of their original price, partly in an effort to reduce potential litigation and settlement costs. Tens of thousands of shareholders accepted the offer, but the measure did not resolve the bank's underlying solvency problem. In March 2017 the bank and its sister institution, Banca Popolare di Vicenza, requested precautionary recapitalization from the Italian state. A proposed combination with Banca Popolare di Vicenza was also considered, but the banks' capital needs remained substantial. The European Central Bank and the Single Resolution Board determined on 23 June 2017 that Veneto Banca and Banca Popolare di Vicenza were failing or likely to fail. The institutions did not meet the conditions for formal resolution under the applicable European framework, so Italy placed them into a national liquidation process. Intesa Sanpaolo agreed to acquire selected performing assets and corresponding liabilities of the so-called good bank for a token consideration, with European Commission approval for state support connected with recapitalization and branch rationalization. Banca Intermobiliare was excluded from that transaction. Shareholders and subordinated bondholders were wiped out under the restructuring, while provisions were made to compensate certain small investors. Veneto Banca therefore ceased operating as an independent banking brand and continued only as a wind-down or liquidation entity.

Veneto Banca began in 1877 as Banca Popolare di Montebelluna, a cooperative banking institution serving the local economy of Montebelluna and the surrounding Veneto area. During the 1960s it expanded by acquiring or integrating other local cooperative and savings banks. This acquisition-led model gradually transformed the institution from a primarily local bank into a broader regional group. A more intensive growth phase began around 2000. Veneto Banca expanded beyond north-eastern Italy into north-western and southern regions and also pursued operations in Eastern Europe. In 2001 and 2002 it acquired 29 branches of Nuova Banca Mediterranea from Banca di Roma. These branches were transferred to Banca Meridiana, formerly Banca Popolare del Levante. Banca Meridiana was later combined with Banca Apulia in 2010. Other important transactions included the acquisition of Banca Popolare di Intra and Cassa di Risparmio di Fabriano e Cupramontana, the latter giving the group a substantial presence in Marche, as well as operations in Umbria and Rome. Several other acquired banks, including Banca di Bergamo and Banca Popolare di Monza e Brianza, were eventually absorbed. The group also developed subsidiaries and investments outside conventional retail banking. Banca Intermobiliare represented an investment-banking and wealth-management interest, while Eximbank was another subsidiary. Veneto Banca held a significant interest in ARCA SGR and had previously invested in Banca Consulia, then known as Banca IPIBI. By 2015 it ranked among Italy's largest banks by assets and was one of the fourteen institutions directly supervised by the European Central Bank. It passed the 2014 European banking stress test following recapitalization. The bank's structural and financial difficulties became acute after the Italian government adopted legislation requiring large people's banks to convert from cooperative structures into joint-stock companies. Veneto Banca completed the conversion in December 2015. The change removed the traditional one-member, one-vote cooperative framework and required the bank to repurchase shares connected with the conversion. At the same time, its capital ratios were under pressure and it planned to raise approximately €1 billion and seek a public listing. The 2016 offering failed to attract meaningful market demand. The issue price was reduced substantially, only one institutional investor reportedly subscribed, and existing shareholders took up a very small proportion of the offer. Atlante, a rescue fund backed by the Italian banking sector, subscribed almost the entire remaining issue and became the controlling shareholder. The capital increase initially lifted the bank's Common Equity Tier 1 ratio, but the improvement was short-lived. Further recognition of non-performing-loan losses weakened the capital base, while supervisory requirements remained demanding. Atlante provided an additional deposit intended for a future capital increase, and Veneto Banca issued state-guaranteed bonds in early and mid-2017 to support liquidity and capital management. The institution was also affected by allegations concerning the sale of its own shares to depositors and retail customers. In January 2017 it offered to buy back shares sold over the preceding decade for 15% of their original purchase price. The offer was intended to reduce potential litigation and settlement exposure, although it also demonstrated the extent of the losses borne by shareholders. More than fifty thousand shareholders accepted the proposal. In March 2017 Veneto Banca and Banca Popolare di Vicenza requested precautionary recapitalization from the Italian state. The two banks explored a possible merger, but the combined capital requirements remained too large. A 2016 stress-test scenario indicated a major capital shortfall for Veneto Banca, and the bank was unable to secure sufficient private-sector funding. Atlante had effectively exhausted its resources, while its banking-sector backers were unwilling to provide more capital. On 23 June 2017 the European Central Bank and the Single Resolution Board concluded that Veneto Banca and Banca Popolare di Vicenza were failing or likely to fail. Because the institutions did not satisfy the conditions for European resolution, Italy proceeded under national insolvency and liquidation arrangements. Intesa Sanpaolo agreed on 26 June to acquire selected good assets and corresponding liabilities, excluding Banca Intermobiliare, for a token price. European approval covered state support for recapitalizing the transferred operations and rationalizing overlapping branches. Shareholders and subordinated bondholders lost their investments, while a compensation mechanism was created for some small investors. The independent Veneto Banca banking business consequently ended, leaving a wind-down entity rather than an operating bank.

• 2017

  Share repurchase offer launched

  [1]Veneto Bancaen.wikipedia.org

  Veneto Banca offers to repurchase shares sold between 2007 and 2016 in response to mis-selling allegations and related legal exposure.

• 2017

  Declared failing or likely to fail

  [1]Veneto Bancaen.wikipedia.org

  The ECB and Single Resolution Board determine that Veneto Banca is insolvent but does not qualify for European resolution.

• 2017

  Selected assets transferred to Intesa Sanpaolo

  [1]Veneto Bancaen.wikipedia.org

  The bank's performing operations are transferred into an Intesa Sanpaolo-controlled good bank while remaining assets enter liquidation.

• 2016

  Stock-market listing and capital offering fail

  [1]Veneto Bancaen.wikipedia.org

  Weak investor demand prevents the planned listing and leaves Atlante to underwrite nearly all of the capital issue.

• 2015

  Demutualization completed

  [1]Veneto Bancaen.wikipedia.org

  The bank converts from a cooperative people's bank into a joint-stock company under Italian banking reform.

• 2014

  Passes European banking stress test after recapitalization

  [1]Veneto Bancaen.wikipedia.org

  Veneto Banca passes the European stress test following recapitalization.

• 2010

  Banca Meridiana is merged with Banca Apulia

  [1]Veneto Bancaen.wikipedia.org

  The group's southern Italian banking operations are consolidated through the merger of Banca Meridiana and Banca Apulia.

• 2001

  Acquisition of Nuova Banca Mediterranea branches

  [1]Veneto Bancaen.wikipedia.org

  Veneto Banca acquires 29 branches from Nuova Banca Mediterranea and transfers them to Banca Meridiana.

• 1960

  Local acquisition-led expansion begins

  [1]Veneto Bancaen.wikipedia.org

  The bank begins expanding by acquiring local cooperative banks and savings institutions.

• 1877

  Banca Popolare di Montebelluna is established

  [1]Veneto Bancaen.wikipedia.org

  The institution that later became Veneto Banca is founded as a cooperative bank in Montebelluna, Veneto.

Historically positioned as a cooperative and relationship-oriented Italian bank rooted in the Veneto region, later reoriented toward national expansion, acquisitions and broader financial-group operations. It ultimately became associated with capital weakness, non-performing loans and the 2017 Italian banking-sector liquidation process.

• Consumer banking

  Retail banking

  Veneto Banca operated a branch-based retail banking business focused on deposit accounts, payment services, personal borrowing and other products for households and local customers. Its historical identity was linked to cooperative banking and regional relationships, although the group later expanded its network well beyond Veneto through acquisitions.

• Business banking

  Commercial and small-business banking

  The bank provided financing and transactional services to companies, entrepreneurs and smaller businesses across its Italian network. Lending to local economies was central to its original cooperative model, but the accumulation and subsequent write-down of non-performing loans became a major factor in its capital deterioration.

• Investment banking and wealth management

  Banca Intermobiliare

  Banca Intermobiliare was a Veneto Banca subsidiary associated with investment banking, brokerage and wealth-management activities. Unlike many of the good-bank assets transferred to Intesa Sanpaolo in 2017, Banca Intermobiliare was excluded from the transaction and handled separately in the liquidation process.

• Retail and commercial banking subsidiary

  Banca Apulia

  Banca Apulia was part of Veneto Banca's southern Italian network and absorbed Banca Meridiana in 2010. It was later sold to Intesa Sanpaolo by the liquidator as part of the resolution and wind-down of the Veneto Banca group.

• 2017

  Alleged mis-selling of Veneto Banca shares

  The bank faced allegations that its own shares had been sold improperly to depositors, savers and other retail investors. It offered to repurchase shares sold from 2007 through 2016 at 15% of their original price, partly to limit legal and settlement exposure. The episode became part of the broader collapse of confidence in Veneto Banca and related Italian cooperative banks.

  Source

Read more

• 2017

  Offer to repurchase previously sold sharesOther

  Background

  The bank faced claims concerning the sale of its own shares to retail investors and sought to reduce potential litigation and settlement costs.

  Action taken

  Veneto Banca offered to buy back shares sold between 2007 and 2016 for 15% of their original price.

  Aftermath

  54,374 shareholders accepted the offer, but the measure did not prevent the bank's subsequent insolvency and liquidation.

  Shareholder settlement acceptance. 54,374 shareholders accepted; approximately 72.6% of shareholders (April 2017)

  Source

• 2017

  Seek precautionary state recapitalizationStrategy

  Background

  Further loan write-downs and stress-test projections produced a substantial capital shortfall, while Atlante lacked the resources to provide another major injection.

  Action taken

  Veneto Banca and Banca Popolare di Vicenza requested precautionary recapitalization from the Italian state and explored a possible merger.

  Aftermath

  The banks failed to secure sufficient private-sector funding and were later declared failing or likely to fail by European authorities.

  Projected capital shortfall. Approximately €3.1 billion for Veneto Banca in the cited adverse stress scenario (2017)

  Source

• 2017

  Transfer selected good-bank assets to Intesa SanpaoloM&A

  Background

  After the ECB and Single Resolution Board found Veneto Banca failing or likely to fail, the institution was handled through an Italian national liquidation process rather than European resolution.

  Action taken

  Intesa Sanpaolo agreed to acquire selected performing assets and corresponding liabilities for a token consideration, excluding Banca Intermobiliare.

  Aftermath

  The independent Veneto Banca business ended. Shareholders and subordinated bondholders were wiped out, while transferred operations continued under Intesa Sanpaolo.

  Approved state support connected with the good-bank transaction. Approximately €4.785 billion (June 2017)

  Source

• 2016

  Attempt a major capital increase and public listingStrategy

  Background

  Veneto Banca needed to strengthen capital ratios and planned to raise approximately €1 billion while seeking a Borsa Italiana listing.

  Action taken

  The bank proceeded with a heavily repriced share offering after demand proved weak; Atlante ultimately subscribed almost the entire issue.

  Aftermath

  Atlante became the dominant shareholder, but additional non-performing-loan write-downs quickly eroded the capital improvement.

  Capital increase. Approximately €1 billion issue; Atlante subscribed approximately €988.6 million (2016)

  Source

• 2015

  Convert from cooperative bank to joint-stock companyStrategy

  Background

  Italian reform legislation required large people's banks above the applicable asset threshold to abandon their cooperative legal form.

  Action taken

  Veneto Banca completed its conversion into a Società per Azioni in December 2015 and repurchased shares connected with the demutualization.

  Aftermath

  The conversion changed voting rights and preceded an attempted capital raising and stock-market listing, but did not resolve the bank's capital and asset-quality problems.

  Source

• 2017

  Veneto Banca requests precautionary recapitalization[1]Veneto Bancaen.wikipedia.org

  Regulation · Other

  Veneto Banca and Banca Popolare di Vicenza sought Italian state support after a projected capital shortfall and the exhaustion of further Atlante funding capacity.

• 2017

  ECB and Single Resolution Board declare Veneto Banca failing or likely to fail[1]Veneto Bancaen.wikipedia.org

  Bankruptcy · Regulation

  European authorities determined that Veneto Banca and Banca Popolare di Vicenza were insolvent but did not meet the conditions for formal European resolution.

• 2017

  Intesa Sanpaolo acquires selected good-bank assets[1]Veneto Bancaen.wikipedia.org

  M&A · Bankruptcy

  Intesa Sanpaolo signed an agreement to acquire selected performing assets and liabilities of Veneto Banca, excluding Banca Intermobiliare, as part of the Italian liquidation process.

• 2016

  Veneto Banca's planned stock-market listing fails[1]Veneto Bancaen.wikipedia.org

  Other

  A planned capital increase and Borsa Italiana listing attracted very limited investor demand, leaving Atlante to underwrite most of the issue.

• 2016

  Atlante becomes majority shareholder after capital increase[1]Veneto Bancaen.wikipedia.org

  M&A · Other

  The rescue fund subscribed approximately €988.6 million of a €1 billion issue and acquired roughly 97.64% of Veneto Banca's shares.

• 2015

  Veneto Banca converts from cooperative society to joint-stock company[1]Veneto Bancaen.wikipedia.org

  Regulation

  The bank completed its demutualization in December 2015 under Italian banking reform legislation applicable to large people's banks.

1. 1Veneto Bancaen.wikipedia.org