Investments in banks’ equity, at times risky, are bearing fruit for Italian pension funds Inarcassa and Enpam.
Inarcassa, the pension fund for self-employed engineers and architects in Italy, took profit on Monte Paschi’s stock after a market increase in prices compared to the price of reference of the 2022 capital increase, the scheme said.
In 2022, the Inarcassa board of directors approved a capital increase launched by Monte Paschi, in view of the bank’s 2022-2026 business plan and to strengthen its balance sheet.
This year, Monte dei Paschi has obtained approval from the European Central Bank to pay its first dividend in 13 years of €0.25 per share, for a total amount of approximately €315m, as it recorded a €2bn profit in 2023.
The Bank of Italy has distributed dividends to shareholders, including pension funds, for a total amount of €340m, including €200m out of a net profit of €815m, and a further €140m taken from a special item for the stabilisation of dividends, based in the current dividend policy, it said.
For Enpam, Italy’s largest private pension fund with total assets over €25bn, the investment in Bank of Italy’s equity will yield returns of 4.5% with gross proceeds of €16.76m, it said.
“This year, too, despite the difficulties relating to high interest rates that the Bank of Italy itself had to pay to the European Central Bank, the strategic value of our investment [in the Bank of Italy] is confirmed,” said Enpam’s president Alberto Oliveti.
He added: “In addition to having a significant financial return, the investment [in the Bank of Italy] allows Enpam, together with the other first pillar pension schemes part of Adepp [Italy’s association of private pension funds] that are among the shareholders, to play a role in supporting the Italian banking system.”
The Bank of Italy’s capital is equal to a €7.5trn divided into 300,000 registered shares, which by law can be held exclusively by banks, insurance and reinsurance companies, foundations, social security institutions and pension funds registered in Italy.
Nine pension funds hold 17,640 registered shares in the bank, and 14 social security and first pillar schemes, including Inarcassa, hold 96,000 registered shares, as of the end of last year, according to the central bank’s latest financial statement.
The remaining registered shares are in the hands of 98 banks, 10 insurance groups, and 42 banking foundations, according to the statement. Shareholders can hold by law a maximum 5% of the capital, directly or indirectly.
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