The great rush to save among Italians

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Italians do not like risk, they are attached to stuff and stay away from turbo-finance. Maybe it used to be like this, today we must also abandon these clichés: an ever-increasing part of disposable income is invested in investment funds, shares, private securities. The ratio has exceeded the European average and even the United Kingdom; it seems strange, but it is true if the Bank of Italy writes it in its latest annual report. Financial assets as a whole have grown by 4.3 percent in nominal terms, reaching six thousand and thirty billion euros, almost three times the gross product of a year and twice the accumulated public debt. Both the modest expansion of investments, driven by the higher savings rate, and the revaluation of assets, in particular mutual fund shares, foreign holdings and corporate securities, have contributed. If we then consider all wealth, including real estate, we are close to 11,700 billion (source Istat together with Bankitalia) and it has not decreased even in 2011, the black year in which the public debt was about to explode. It continued to grow up to 8.3 times the disposable income, in line with France and more than Germany. Is this opulence poorly distributed, is it concentrated in a handful of rich people? Also, but it is not a small handful of gluttons. In any case, once again the facts belie the propaganda . "Rich forever?", asks Pierluigi Ciocca in his historic ride on the Italian economy. Maybe not, but for now the Italians, as a whole, are.

Between 2010 and 2024, the value of household financial assets increased by almost 57 percent with a shift towards managed savings: the relative share rose from 22.4 to 33.0 percent of total assets. This favored the expansion of foreign assets: in 2023, the last year for which data is available, it stood at around 60 percent, up from around 45 in 2014. So is there a flight of savings? The stakes, those six thousand and some billion, are not small, many want a slice of it . In Italy, a game is being played that is becoming more complicated, sometimes confusing, every day. There are already large funds, mostly American with some English and French. Italian insurance companies have joined in (Generali and Unipol in particular). There are important shareholders in the field such as Delfin, led by Francesco Milleri, and Francesco Gaetano Caltagirone. There is a Sienese David, Montepaschi, who is looking for space among the Goliaths. The Unicredit cavalry led by Andrea Orcel has arrived, while from the besieged fort of Piazzetta Cuccia Alberto Nagel is preparing his gambit: he is sacrificing the key share in Generali to take over the bank created about ten years ago by the Lion of Trieste. A defensive move, of course, but not only that: Mediobanca wants to jump on the train of the new financial revolution that is surprising everyone. In the 80s the barriers between commercial banks and investment banks fell, Italy followed suit ten years later. Then came the funds . Today the floodgates are also coming down with insurance. The job of the banker is no longer to collect deposits and give credit, to act as a "policeman at the crossroads of the economy" as Raffaele Mattioli said way back in 1961, but to manage the wealth that spins like a top around the entire world because capital knows no borders.

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Fintech, cryptocurrencies, private funds, equity, assets, liabilities, a new way of looking at savings and investments, all this has a strong impact not only economically, but socially and politically: the map is always moving like that of the Marauder in Harry Potter. In 2024, the ten main US funds managed assets for almost 48 trillion dollars, with Vanguard, BlackRock and State Street alone controlling over 22 trillion, as much as all the American banks (the data are from the Federal Reserve). The chase begins with the 2008 crisis, when the profits of the funds were 12 trillion, a figure comparable to that of the banks. Since 2019, a large part of the US banking system itself has had the large funds as its main shareholders: Vanguard, BlackRock and State Street hold 20 percent of JP Morgan . Even the shares of Italian banks are in the hands of funds: Unicredit, Intesa, Mediobanca, not to mention the same popular banks whose structure changed with the 2015 reform, from the one in Milan that became Bpm and was asked to marry by Unicredit, to the Bper of Emilia Romagna (controlled by Unipol) that has the green light from Consob to merge with the one in Sondrio. The tangle is even more intricate: the larger funds control the smaller ones and through cross-shareholdings they control each other. BlackRock is owned 14 percent by Vanguard, 6.7 percent by BlackRock itself and another 4.5 percent by State Street. The same three-way scheme is repeated for Vanguard and State Street, a tangle that bypasses the rules of the stock exchange. And it doesn't end there, Big Money in fact also embraces Big Tech. The usual Vanguard, BlackRock and State Street are the main shareholders of Nvidia, Intel, AMD, Broadcom, Qualcomm with shares ranging between 20 and 25 percent.

The tangle is even more intricate: the larger funds control the smaller ones and through cross-shareholdings they control each other.

While traditional banks feed themselves with customer deposits to provide credit, new players draw mainly on wealth accumulated over time or created by the game of exchanges that has become even more frenetic and dangerous with the introduction of crypto money . Vanguard has been successful with funds that replicate, do not anticipate the market, are called passive, cost less and yield more. Meanwhile, the embrace with insurance is tightening. Life insurance policies are a way to escape the uncertainty of the moment and become among the main sources to draw from. Why ever borrow bank money that, even when interest is low, must still be returned quickly; life insurance is held for a long time, often until the crucial death, it is excellent not so much for playing the stock market as for financing a productive activity.

The financial battle that has broken out in Italy must also be seen in this overwhelming news. The sides are complicated, between ego expansions, ambitions, the desire to create a system of power, a banking-industrial complex whose strings end up in the hands of politics. But two industrial logics can also be identified. The first is to grow traditional banks through mergers and acquisitions, let's call it the "third pole model" even if it extends to Unicredit which, taking over Bpm, could expand its territorial presence in Italy where it is overtaken by Intesa Sanpaolo (in Germany where it is already present, with the control of Commerzbank it can become number one). The second is to enter the new playing field so as not to let ever larger slices of wealth slip away. It is not a question of using it all within national borders as the sovereignists would like (unless we are expropriated like gold for the homeland, customers want to use it in the most advantageous way), but of making space among the giants beyond the border.

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In which of the two logics can the Conradian duel for Generali be placed? Considered (perhaps increasingly wrongly) both the piggy bank of the Italians and the lung that gives breathing space to the public debt by buying government bonds, the company is controlled by Mediobanca with 13 percent and the way to take it at the lowest possible cost passes precisely through Piazzetta Cuccia. Delfin and Caltagirone are shareholders of MPS, Mediobanca and Generali. If the Sienese bank acquires the Milanese one, we arrive d'amblais in Trieste. At this point, Mediobanca offers its entire stake in the Trieste company in exchange for Banca Generali, a transaction worth 6.3 billion euros. In this way it becomes much bigger, probably too much for MPS forced to significantly increase its capital. Before the merger, Mediobanca is worth 16 billion euros on the stock exchange, Montepaschi 9 billion. Private shareholders and the Treasury (aka the taxpayer) should pay dearly for their target .

The divorce from Generali can benefit both spouses, the relationship is now worn out, even if still cumbersome. The Trieste company would no longer have in its capital what many consider a ball and chain (this was also the opinion of Leonardo Del Vecchio himself). Mediobanca, in turn, changes skin and in one fell swoop Piazzetta Cuccia doubles the managed assets from just over 100 to over 200 billion euros; it would have taken ten years to get that far.

Divorce from Generali can benefit both spouses, the relationship is now worn out, even if still cumbersome

The idea was already ripe in the last years of Enrico Cuccia , but his successor “Vincenzino” Maranghi, guarantor of continuity, had dismissed it like this: “Investing private money is a great responsibility and in the morning when I shave I don’t want to be ashamed”. A timid attempt had already been made in 2001 with Banca Esperia together with Mediolanum, which then became the private banking division of Mediobanca in 2017. Left without the triple lung that guaranteed the collection of money with Commerciale, Credito Italiano and Banco di Roma, new nourishment had to be found and in 2008 Chebanca was born! absorbed last year . However, no one had the courage to cut the umbilical cord with Generali, not even after Mediobanca had sold all the other shares it had put together in Cuccia’s half century.

Once the syndicate agreement that bound the historic shareholders with over 50 percent of the capital was dissolved, important shareholders like Del Vecchio began to bite the bullet, asking for a change, complaining that the golden income from insurance has now become the main source of earnings. The financial crisis and the Ligresti crash that exposed Mediobanca for over a billion euros, make it a priority to get the accounts in order. And while old doors are closing, new ones are opening: together with the traditional investment banking activity, consumer credit with Compass is growing, and above all wealth management, that is, the management of assets that today is also becoming in Italy the main profession of those who mediate money and invest clients' money. The gap between active and passive rates is a fluctuating and now dried up source of earnings. Commissions on banking services are not enough. Making that six thousand billion cake grow and not leaving it as a financial dead hand, is the real frontier of this phase. In Italy, the lead goes to Fideuram, which is part of Intesa Sanpaolo, while Montepaschi is defending itself, while Unicredit has sold every “financial product factory” , delegating everything to Amundi, the French group controlled by Crédit Agricole, the European leader with over two billion in managed money, followed at a distance by Allianz and UBS (BlackRock and Vanguard are however five times larger).

Acquiring Banca Generali is a real turning point for the investment bank in search of new business. Already a priority, asset management will become prevalent, explained Nagel (who turns 60 today); the future is played out between these two adjectives. Consumer credit and investment banking remain, which today divide the turnover into three almost equal parts. The proposal had arrived on Donnet's table shortly before the pandemic broke out. The boom of the last two years, also driven by the rise in interest rates, has increased stock market values, causing the stars to align: the package of the entire company in Mediobanca's portfolio is now worth as much as the entire Banca Generali . The mini pact, i.e. the consultation agreement that brings together 11.87 percent of the capital, said yes: Unicredit, Bolloré, Mediolanum, Benetton, Fin.Priv are part of it. (which also includes Generali), the Pesentis' Italmobiliare, the Berlusconis' Fininvest. Caltagirone is against it and has asked Consob to postpone the meeting of next Monday 16th indefinitely. Accusations of covert maneuvers are starting to emerge at Piazzetta Cuccia, while Mediobanca denounces the "obvious shareholder connections" of Caltagirone and Delfin. Milleri appeared more available and declared that "the operation does not hinder the plans of MPS", a message of appeasement without turning his back on his current ally.

But what does the Lion of Trieste think? Does he feel he has lost a leg or is he freed from the “Mediobanca ballast”? In a long interview with La Repubblica, Donnet explained that getting rid of a non-strategic asset and entering into an industrial agreement with a new asset management hub that distributes Generali products is a good idea. In any case, the board of directors will decide. The French manager (who has also become Italian) has taken Caltagirone head on, who in turn had labeled the agreement with the Natixis company to jointly manage asset management (1,300 billion from the French company, 650 from the Italian one) as an “unfortunate project”. He is “dismantling” Generali, according to his opponents, including the government. Ivass, the guardian of insurance, has asked for further information on the real creation of value and above all on governance: who will be in charge in the long run, the Italians who put in the centenary face of the Lion or the French who put in more money? For now there will be a president of Natixis and a vice president of Generali, while for the CEO the opposite will happen. As for money, it too is weighed, not just counted. Governor Panetta said that the operations underway must create value. "The mergers represent a delicate moment of discontinuity in the life of intermediaries. They must serve to strengthen them, and for this purpose it is necessary that they are well conceived and aimed solely at creating value". Where solely is the key adverb. Value for whom? A big question, to which there is no ex ante answer: no plan or prospectus, no slide can replace the burden of proof.

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