Tuesday, October 22, 2013

Top man Bossi

In January 2012, Giovanni Bossi, bossi of the Venetian Banca IFIS, borrowed E2bn for 3 years at 1% from the ECB's LTRO scheme and used it to buy E2bn Italian government debt which was yielding over 6%. The 5% yield differential was worth E100m a year compared with Banca IFIS's market capitalisation of just over E200m in early 2012. The bank's market cap has since more than doubled to E530m and Boss Bossi's personal shareholding has increased by E8.2m. Complimenti!


Anonymous kinglear said...

Hm yes BUT....there is in fact no basis for the increase to 2.5 times the original market cap. The E100m is subject to tax and personally, although this is a nice piece of business for this tiddler bank, I'd worry a lot about the future ( ECB takes cash back etc etc)

3:10 pm  
Blogger Winchester whisperer said...

He has to repay the loan in Jan 15. Let's see if he sells any of his shares before then.

3:54 pm  
Blogger Angus said...

The next thing you know he'll be investing in Alitalia.

7:16 pm  
Anonymous kinglear said...

In fact I suspect that all these LTROs will have to be rolled over. They were mostly taken out originally to give the banks some liquidity and cover the gaping holes. So now there are no holes and lots of liquidity? Hmmmmm.

9:36 am  

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