Thank you for your usefull remarks. We have already registred more than  32 000 visits since April, 2008. We are in fact the best informed site on the wrongdoings of UniCredit. Give us more information. We shall stop Mr Profumo from hurting the reputation of our Bank.

COME BACK TO US FOR MORE KEY INFORMATION!

Tuesday, 27.01.2009

Unicredit is lobbing to get some EU financing, because of the „credit crunch” in the CEE countries. This is just absurd. If there were a "crunch", Unicredit would be the one to be blamed. Unicredit disregards its CEE subsidiaries, forces them to enter into asymmetric contracts with the Italian developer Pirelli, drains together with Pirelli their real estate portfolios and NPL collateralized with clients’ real estates. Moreover, hides these practices and forgets to disclose to the markets in Poland long term contracts signed with Pekao and Pirelli. In our opinion, the Polish government and regulators should seek EU funds to solve these problems and buy Unicredit out of the market at the price reflecting the Pekao liabilities forced by Unicredit. It is clear, that Unicredit practices in the CEE countries go against EU antimonopoly regulations. It should be taken into account ? Shouldn't it ?

Thursday, 15.01.2009

UniCredit chief scrutinised as bank struggles CLICK . FT repeats arguments presented in our statement yesterday, however, we believe that mismanagmnent in times of finantial disstress is not acceptable at all and at our expanse.

    We do believe that UniCredit institutional investors should carefully study the following statement and react before it’s too late. We learn that Unicredit CEO, Mr. Alessandro Profumo visited Abu Dhabi last week to ask the Aabar Investment Company to participate in a new equity injection - UniCredit may be eyeing new investors in Abu Dhabi, report says CLICK. This information, delayed by a week, explains the dramatic drop of the Unicredit share price since last week; it proves that Mr. Profumo is well aware that the equity hike approved by the Shareholders’ meeting was inadequate – a key issue raised by us during the meeting two month ago.

Monday, 22.12.2008

1. Since day one, it is our profound conviction that only a sea change at the top of Unicredit and Pekao will lead the Unicredit Group to a reconciliation with its shareholders. Regardless of our personal opinion, we are extremely worried, as markets are, by increasing speculations that Mr. Profumo and Bielecki intend to quit (recently, Mr. Bielecki cowardly sold most of his Pekao shares). Markets react very nervously to such information. In October, a possible dismissal of Mr. Profumo still had a negative impact on the share price, but last Friday for the first time, such a rumor had a strongly positive impact on the share price - up 12% ! 
2. We call to the sense of responsibility of both Mr. Profumo and Bielecki. They should in a clear personal statement (signed by nobody else) certify that their intention is to lead the bank throughout the crisis for the next two years at least. If this is not the case, they should immediately resign and let somebody else do the job in the interest of all shareholders.
3. "Two profit warnings in recent months have shown the Italian bank's international reach, once seen as an advantage, has left it more exposed than rivals to the crisis. Boosting capital by 6.6 billion euros by skipping its cash dividend and raising funds. Libya took a 4.6 percent stake. Prospects for 2009: Capital still a concern, especially if central and eastern Europe weakens and headwinds build in investment banking and asset management. Speculation has been rife the crisis will cost CEO Alessandro Profumo his job."
4. Unicredit: Achiles Heel of Italian Econom. CLICK

Friday, 19.12.2008

1. Unicredit drops property deal, profits may suffer. CLICK The Unicredit convulsions to get cash to finance banking activities has been futile until now.
2. Unicredit hasn't managed yet to add to its capital base. The share price stays far below the price of 3 Euro, it proposed to its shareholders for new share issue at the annual meeting. As a result it will let Mediobanca to issue highly speculative cashes, hybrid derivative, which will increase volatility of the share price even further.
3. Unicredit cuts its financial exposure and takes the loss - pays PLN 300 million fine to withdraw from the transaction with the Polish Treasury.
4. Mr. Profumo announces that UniCredit lost 75 million Euro in the Madoff pyramid. Again, markets would be more confident, if they were properly informed. We estimate that Unicredit Group exposure to Mandoff pyramid exceeds 1 billion Euro.

Wendesday, 17.12.2008

Unicredit Group exposure to Madoff funds has increased exponentially over past two days. IFSC – based Pioneer funds share 2,5 billion loss with Geneva – based, Santander. Austrian, 25% owned by Unicredit, Medici AG admitted to 2,1 billion potential loses. On the top, Unicerdit annouced 75 million direct exposure. 

Monday, 15.12.2008 

"The Polish Ministry of the State Treasury ("MST") and UniCredit signed today an amendment to the Agreement dated September 2, 2008. On the basis of the amendment, the MST and UniCredit agreed to finally waive their respective Put Option and Call Option with respect to the 3.95% shareholding of Bank Pekao S.A. held by the MST ("MST Stake"). In connection with the waiver of MST"s Put Option, UniCredit agreed to pay to the MST PLN 300mn (ca. 78mn) and to grant to the MST a Put Spread Option to be settled in cash with respect to the MST Stake. Compared to the UniCredit consolidated core tier 1 ratio as of September 30, 2008, the signing of the amendment shall generate a positive impact of ca. 8 bps, net of all related costs. Milan, December 11, 2008"

What mischievious annoucment ! Mr. Profumo, why did you sign an agreement with the Polish Treasury on September 2, 2008 to amend it now and pay a fine of 78 million Euro ? You call it success. Why did you invested in the Madoff pyramid to loose 75 million Euro ? You cost us 153 milion Euro in one day, based on still unreliable public annoucments alone. 

Monday, 8.12.2008

1. Last Friday, on December 5th, Unicredit share price tumbled by 7,21% to historical low of 1,506. Since shareholders' meeting, on November 24th, the markets shaded 25% of of Unicedit value, twice as much as banking indices and financial competitors in Europe. We commented on bad decisions taken at the meeting in our report of November 17th.
2. But this time, the reasons behind a dramatic price decrease are not only due to inadequate and ill-structured capital increase or wrong strategy but also subject to transaction which was hard to check on in the company news: "Unicredit is in talks to sell real estate assets worth about a billion Euros to property management fund Fimit, Il Sole 24 Ore and la Repubblica said. * MF reported the deal had been signed, with UniCredit to book a capital gain of 600 million Euros this year." . First of all, Unicredit real estate holdings are crown jewels for entire Group and their sale at the bottom of the market tells us about sheer desperation of the Unicredit’s management. Transactions itself causes our concerns as well. A buyer of the Unicredit's real estate happened to be a part of the Unicredit Group few months ago and was sold to Lehman for mere Euro 55 millions just few days before Lehman collapse... Are they really reach enough to pay a billion cash for Unicredit assets or it's another potential attempt to boost financial results on paper with the use of creative accounting and no cash gains in bank’s coffins? Unicredit sells Fimit fund manager stake to Lehman, managers for 55 mln euros CLICK.
3. Unicredit lost in the court against Consob - it opens the door to more court cases against Unicredit itself by its clients and against Mr. Profumo personally -  UniCredit's UBM action against Consob fine rejected. CLICK.
4. Unicredit Board seems not able to close any deal properly to help the bank.

Monday, 17.11.2008

1. We did vote against inadequate and ill-structured capital increase at the shareholder meeting of Unicredit.
   
2. Shareholders Pay as Barclays, UniCredit Raise Capital CLICK. We believe that, if, so called, cashes are sold instead of shares the acquired financial means cannot be treated as a new equity capital. Beside, this hybrid derivative will add a great deal to the volatility of share price and could be used for speculative attacks.
   
3. UniCredit swells ranks of mortgage-backed bonds CLICK. Sourcing cash from loans to carry with the business, instead of raising capital adequately, weakens even further Unicredit fragile,  financial structure.
4. Unicredit Russia sees 2 bln euros from parent in 09. CLICK We did indicate during the meeting that Unicredit is responsible to cover capital needs of its dauther companies in the CEE. We did not get a break up by the country what cash and capital shortages are. Moreover, we did indicated that the situation i Ukraine might result in dire situation for Pekao and Bank of Austria, who control two of Unicredit subsidaries there. CEO did not responded to our inquiries.
5. Bon apettite Mr. Profumo, as we are not sure what you are after.

Friday, 24.10.2008

1. UniCredit Falls to 11-Year Low as Analysts Question Capital CLICK
2. Unicredit faces problems with capital increase, since there is no eager investors for risky investment. The last resort would be goverment taking equity stake, but even then Unicredit's hunger for capital would be hard to fullfeel.
3. Foreign currency exposure of Unicredit increases as the currencies in CEE are being devalued rapidly. The value of Unicredit CEE holdings are doubious at this point and depend on external factors.
   

Sunday, 18.10.2008

Silvio Berlusconi dislikes the Unicredit's CEO, Mr. Profumo ?  Libya bought a share in the Italian Unicredit CLICK

Friday,10.10.2008

1. Credibility is a key word, when the DJIA slides down by 7%. Are we going to point out our finger at those who are responsible - selected, overpaid and greedy top executives, who've driven the markets, where we are at this point (?). They've made mistakes - no questions about it.
2. The frequent trading suspensions in the Unicredit shares have caused problems for the sellers and contribute to the Unicredit credibility dylema. 

Tuesday, 7.10.2008

Statement by Unicredit' CEO, Mr. Alessandro Profumo that we dealing with similar crises as the one of 1929 disqualifies him from the post he has been holding until now. He sure would not like to fall alone and drags us with himself on his way down. Not the crises but Mr. Profumo himself is fully responsible for investor' mistrust toward Unicredit and its lack of credibility in the financial markets. Cowardly, he looks for excuses. We do share Goldman's perspective CLICK on the Unicredit's future unless the the changes in Unicredit' management take place soon.

Tuesday, 30.09.2008

During our May shareholders' meeting in Rome, we presented the sad truth about Alessandro Profumo: despite his self-proclaimed success and bright numbers, he has been costing us - shareholders 250 million Euro per day, since June 2007! Yesterday, Saint Michel's day, he costs us no less but 4,5 billions.Today he added another 5 billions to the bill. We urge the Supervisory Board of UniCredit to make a clear, fair and true statement about our real exposure to market risks in Germany, Russia, Ukraine, Kazakhstan, United States as well as in Austria and Poland. Tricky Profumo has abused us all. Parmalat! Telecom Italia! Sub-primes! Derivatives (CDO, Cirs)! Bank Austria! BPH! The Chopin Project! We are paying today the very high price for his dishonest moves. 
UniCredit needs, as soon as possible, the nomination of the loyal and professional management. In the times of trouble, there is no better medicine than TRUTH. Those who get it first today would be better off in the near future. The magician's spring ends up in chaos. Mr. Profumo is definitely a man of the past. If anybody has any more doubts , please, compare the share performance of Unicredit with share performance of Intesa Sanpaolo. Unicreit share price hit absolute minimum since '97 and Mr. Profumo got his post. Unicredit lost 24% of its value in two days. The loss would be greater, fortunately trading was suspended 6 times over two days

Unicredit' shareholders

Monday, 01.09.2008

Unicredit CEO, Alessandro Profumo comes to Poland this week. Would he simply get what he comes to get?  What about Unicredit's obligations to the State Treasury, declaration to KNF about Ukrainian market and future of Pekao on the WSE? How about excessive 2008 dividend, paid out without required by law KNF approval? And finally, would the goverment oficials touch on the issues related to  compensation for Pekao from Unicredit for Unicredit undeniable role played in Project Chopin Chopin agreement CLICK, Project Chopin CLICK?

Thursday, 28.08.2008

1. Conflict in Georgia coupled with political tension between EU and Russia and slide down of equity and debt markets in region may have direct impact on the value of the Unicredit's investments in Russia, Ukrain and Kazahstan. Unicerdit's strategy to go East seems today even riskier. Russian firms face rising costs of borrowing after the conflict CLICK
2. New credit hurdle looms for banks CLICK with Unicredit in midst of it.
3. Shareholders have little reason to rejoice Pekao-BPH merger CLICK
4. Additionally, the minority shareholders have initiated court actions questioning 2006 and 2007 Pekao's Financial Statements, based on allegations related to "Project Chopin CLICK" and Pekao signing hidden contracts with majority shareholder Unicredit and backed by Unicredit - Pirelli RE. Bank Pekao granted to Pirelli exclusivity to its real estate properties and to its NPLs (indirectly its clients' properties) but forgot to make a public anoucment.
5. Polish Treasure plans to sell its holdings in Pekao (4.1%) to Unicredit at the beginning of September. There is a strong opposition to this move in the Polish Parliament. The value of the Treasure holdings in Pekao has deteriorated by PLN 1 billion since the merger with BPH. The opposition members of Parliament ask questions about "Project Chopin" and Unicredit involvement in "Chopin Agreement" which forced Pekao to sign contracts against its own interest with Pirelli.

Monday, 21.07.2008 

1. € 3 billions more -  HVB investors demand 3 bln eur from UniCredit CLICK. € 5 billions was to settle part of the claims several months ago, when Unicredit appealed court decision voiding BACA takeover. In both cases, Unicredit CEO, Mr. Alessandro Profumo is personally blamed in the court by minority shareholders. No suprise - see Lettera a Profumo CLICK.
   
2. UniCredit to pay 300 mln euros to Parmalat CLICK . 
   
3. Italian Antitrust Authorities initiated investigation against Unicredit  to check whether its clients were informed about potential high provisions. 
4. If Pekao's shareholders were proposed to swap their shares for Unicredit's shares (?) - let's see UCI performance Unicredit, 3 years CLICK. Such swap would be very risky in a long run for Pekao's shareholders considering on-going legal exposure of Unicredit in Germany and Italy, financial and legal consequences of  "Project Chopin CLICK" and significant exposure to global crisis. UCI  share price long ago dived through 3 year minimum and is about to hit absolute minimum in "Mr. Profumo's times".
5. Share performance comparison for two leading banks in Poland: PKO BP and Pekao SA over three year period, indicates, that beside effects of global credit crisis, other factors such as bad management, transfer of assets below the market price, unsuccessful merger with Bank BPH (November 29th, 2007), financial consequences of "Project Chopin", payout of excessive dividend (June 3rd, 2008) were noticed by the markets and reflected in the Pekao's share price. PKO BP, 3 years CLICK,  Pekao SA, 3 years CLICK.
6. We would like to add that potential, but hypothetic pull out of Pekao's shares from stock exchange would go against privatization contract, agreement with Treasure Ministry, declarations to KNF and would diminish trading volumes on the Warsaw Stock Exchange.
7. Two out of three new members of the Management Committee  - Marina Natale, named Head of the Private Banking Division, Jan Krzysztof Bielecki, CEO of Bank Pekao were involved and signed documents related to "Project Chopin" UniCredit strengthens further its management structure CLICK. We do have our doubts whether Mr. Profumo's intention was to strengthen UCI's management structure -  rather to ensure loyalty of his subordinates. Quite unique selection criteria.
   

Monday, 07.07.2008

Unicredit's shares has gone down by almost 20%, since it presented its new strategy. New strategy happened to move the share price further down compared to the competitors - Unicredit's market capitalization passed through € 50 billions. The strategy announced by Mr. Profumo does not deal with the real problems. What about "Project Chopin" and its consequences? What is the legal exposure of the Unicedit Group to credit-default, interest rate and currency swaps in Italy, Germany and the US ? Were there counter parties to these contracts informed about the risk ? Who are they ?  Stop Loss CLICK

Monday, 30.06.2008

1.  UniCredit to grow in east Europe, shrink in west CLICK
2. "Unicredit shares were down 3.89 percent at 3.96 euros by 3:24 a.m. EDT as the DJ Stoxx index of European banks <.SX7P> fell 2.59 percent as it unveils its plans" Unicredit shares CLICK. Share price hit 3 year low, very close indeed to 4 year low. Unicredit's share price has gone down by 6%, since it announced its new strategy.
3. "UniCredit, the most European of Italy's banks, has suffered more from current financial market storms than domestic rivals such as Intesa Sanpaolo <ISP.MI>, which have conservative domestic lending policies."
4. "Unicredit said implementing new guidelines on capital adequacy known as Basel 2 would give it a Core Tier 1 ratio of 5.74 percent and this should be over 6.2 percent in 2008." (...) "It had previously reported a Core Tier 1 under Basel 1 of 5.5 percent at the end of the first quarter and aimed for 6.0 percent at the end of this year on the same basis."
5. Assets in the CEE countries are regarded as bearing more risk. Unicredit with its new strategy goes against the tide and takes no clear measures to correct its capital adequacy ratios, but instead unveils risky strategy. How risky? Project Chopin CLICK " Analysts had worried its Core Tier 1 ratio -- which is based on capital available against the risk perceived in its assets -- would not be adequate for growth."
6. Pekao and Pirelli RE share prices followed the same pattern. Pekao market value CLICK          Pirelli share info CLICK  Both hit their historical minimums. Pirelli's share price has already gone down by 80% in recent months. Please, remember that Bank Pekao gave the rights to its real estate and NPLs for 25 years to Pirelli, according to Project Chopin. These facts have not been yet disclosed to the markets for over two years.
   

Wednesday, 25.06.2008

1. We took part in the Annual Shareholders' Meeting of Bank BPH. We asked CEO, Mr. Józef Wancer, whether he was informed by Unicredit (at the time majority owner of BPH - Mrs. Natale, who signed Chopin Agreement for Unicredit, was at the time of merger with Bank Pekao a member of the BPH Supervisory Board) or Pekao about Project Chopin, Chopin Agreement and Shareholder Agreement entered by Pekao and Pirelli. The answer was very clear: I did not know about it. The secretive project and hidden contracts were never revealed to the markets. In our opinion, hiding contracts worth at least over € 1.5 billions  and forcing Pekao to enter into unfair contracts will cost Unicredit its banking license in Poland, if the rules are to be followed. If the rights granted to Pirelli were disclosed to the markets, they would have a huge impact on Pekao and BPH valuations. On the other hand, significant value of BPH assets was transferred directly to Pirelli, as result of Pekao - BPH merger. Another shareholder indicated that BPH profits earned by the bank before the spin off of its assets should stay on the BPH balance sheet  and should not be transferred to Pekao. These earnings were bases for excessive dividend payout for 2007. 
   
2. The very fact of existence of  Project Chopin was publicly confirmed by the Unicredit's CEO Mr. Alessandro Profumo during  Unicredit's Annual Meeting in Rome on May 8, 2008. He said (minutes): "

"the Chief Executive Officer replied to Mr.
Marbot who noted that – according to the so-called Chopin
Project – Pirelli Real Estate had apparently been granted a
25-year option on the purchase of all the property belonging
to Bank Pekao, adding that the transaction had been put in
place by the Chief Executive Officer in a conflict of interest
situation, since in 2005 he was a member of the Board of
Directors of Olimpia.
(...)
Specifically, the CEO emphasised that the shareholders’
agreement had been signed by Pirelli Real Estate and Bank
Pekao and not by UniCredit, (...).

Regarding the often mentioned right of Pirelli to purchase the
property put up for sale by Pekao, the Chief Executive Officer
specified that Pirelli Pekao Real Estate held pre-emptive
rights and not an option for the sale of real estate property
put up for sale by Pekao, at the price proposed by Pekao.
Should Pirelli Pekao Real Estate not accept the price, Pekao
would be entitled to sell the property to others at the
proposed price. (...).
Moreover, UniCredit had not exercised any influence on Pekao’s
decisions and the fact that the Chief Executive Officer was a
member of the Board of Directors of Olimpia, in his opinion,
did not constitute any conflict of interest whatsoever.
Regarding the claim of 2.5 billion EURs in damages on the part
of the minority shareholders in respect of the Chopin Project,
the CEO noted that no legal action or petition had been
notified to Pekao or any other member company of the Group.
Conversely, regarding the question about provisions for risks
associated with litigation involving minority shareholders in
Germany as well as in Poland (where the Group’s arguments had
been sustained in the first instance) the Chief Executive
Officer pointed out that if the question – albeit vague –
referred to the transfer of BA-CA from HVB to UniCredit, no
ruling of the Munich Court had pertained to the price paid for
the sale, as explicitly declared by the Court itself in a
press release. The Munich Court had ruled in the first
instance only as to alleged formal flaws in particular
relating to the conduct of the HVB Annual General Meeting that
approved the transaction in 2006. An appeal has been made
against the ruling and UniCredit is confident its arguments
will be upheld. Therefore, there was no reason to review the
transfer price of BA-CA, which had been agreed by UniCredit
and HVB based on valuations by outside experts, confirmed by a
fairness opinion issued by a leading international merchant bank and also audited by KPMG. It was not deemed necessary to
make any provision." 

We believe no comments are necessary (no wonder this fellow looses his credibility in the markets) except one: according IAS the rights defined in Pekao - Pirelli Shareholder's Agreement should be valuated and  disclosed  in  IS, BS of Bank Pekao and Unicredit Group.

Monday, 16.06.2008

1. € 5,2 mld, this is our conservative estimate of the Pekao cash losses, the result of unprecedented extorsion of funds by Uncredit from the No. 1 Polish bank in 2006 and 2007. In particular :

   • spin off of Pekao Development at 20 x below market price – € 0,4 mld.
   • Pirelli's rights over Pekao's present and future real estate and NPLs  – € 1,3mld.
   • over-payed BPH assets and ill-structured merger – € 2,8 mld.
   • dividend payout as of 2006 – € 0,3 mld.
   • dividend payout as of 2007 – € 0,4 mld.
     

   Warning! € 5,2 mld tops Pekao's equity.

    

2. This week, the share prices of both banks, Pekao and Unicredit, have gone through the floor for 6 consecutive days. Pekao market value CLICK is now lower than before the merger with BPH. Unicredit shares CLICK followed the same pattern. Its market value is now lower than before merger with Capitalia. In other words, Mr Profumo has acquired the 3rd bank in Italy and the 3rd one in Poland and has DESTROYED both of them!  From the shareholders' point of view, merging 2 banks makes sense if  1 + 1 = 2,++. Instead, for Mr. Alessandro Profumo & Mr. Jan Krzysztof Bielecki the merger makes sense if they can destroy value and 1 + 1 = 0,8!

3. We, shareholders, clients and employees pay the high price and do not see any excuse in the fact that there is a financial crisis. The ongoing turmoil was provoked by those bankers who are only driven by their personal ambition, among whom Mr. Profumo shares a major responsibility for delivering unreliable information as well as for repeated abuses and misconduct (The Bubble CLICK). Should his personal benefits go up and up regardless of the share price of the institution that he manages?

4. Pekao's share price was hit by a huge dividend exceeding yearly profit. This irrational decision was forced by Mr Profumo himself as a mean to pay for his mistakes and get Unicredit financial ratio a bit up Moody's. CLICK. Minority  shareholders got 9,6 PLN in dividend, but lost 100 PLN in share value.

5. UniCredit faces calls to revamp cap increase plan CLICK

Monday 09.06.2008

1. We will take part in the Annual Shareholders' Meeting of BPH Bank. We believe that the Management and Supervisory Boards of the Bank, still controlled by Unicredit, acted against BPH's interest. The "Project Chopin", still not officially disclosed, caused a transfer of BPH assets directly to Pirelli. No independent evaluations of BPH 285 (transfered to Pekao) or BPH 200 (acquired by GE Capital), were ever performed. These are just two of many other issues, which will be set for discussion during the meeting.
2. The BPH-Pekao merger, caused value destruction, at minority shareholders' expense. The Boards of both banks share legal responsibility for financial damages caused to BPH  shareholders, franchisees and clients.
   
3. The Chief Financial Officer and Vice President of Pekao resigned last week. It is the third defection of a key manager in 3 weeks; this, while our five court trials are expected to take place soon.
4. On Friday, Unicredit shares price reached a 3-year low. Unicredit market value has thus dropped by €50 bln on the Milan Stock Exchange in one year. Unicredit share info CLICK
5. Pirelli follows the same tracks. Pirelli share info CLICK
   

Monday, 19.05.2008

1. Gazeta Bankowa, the Polish bankers' weekly magazine reports on Pekao shareholders' meeting. Pekao was not keen to let journalists in. No press assisted the meeting except Polish TV which was not allowed to bring in its camera. In Italy such censorship is unthinkable but Mr. Jan Krzysztof Bielecki's conception of democracy applied to Poland is limited and old fashion, alas. If you read Polish see Dywidendowy kabaret. CLICK, Włoska Robota Wprost 05.05.08 CLICK 
2. Pekao shareholders' meeting was marked by evident lack of transparency and neutrality of Chairman JK Bielecki. In the meeting's minutes we did not find our official statements despite that they were remitted in written form and according to the rules.
3. Przemysław Gdański Vice Chairman of the Management Board of Pekao and certainely one of its most promising and professional members just resigned. Pekao's management team is cracking down. If you read Polish go to Traci doświadczonych ludzi. CLICK
4. BRE Bank suspended any rating about Pekao due to lack of visibility, bad first quarter results, managerial crackdown and difficulties linked to the Pekao-BPH merger. BRE zawiesza wydawanie rekomendacji dla Pekao. CLICK
5. On May 8, Unicredit's rating by Moody's downgraded from stable to negative. This was justified by lack of equity and a bad first quarter. Moreover, as for the sub-prime crisis, "Il Sole 24 Ore", in its 8 May edition, reveals that Unicredit accounts for half the losses generated by Italian banks (2 out of 4 bln €). As of 2007, Unicredit had only passed 25% of those losses (0,5 bln €) through its income statement feeding rising fears that Alessandro Profumo will not reach his optimistic targets and that more bad news are to come. In the first quarter of 2008, HVB, Unicredit German affiliate, was constrained to admit 0,4 bln € exceptional losses due to sub-prime operations. Who will trust that Mr. Profumo was unaware of it at year end? In our opinion, UBS decision to write off its losses immediately was the only fair and efficient one. It allows the shareholders and the management to redefine their strategy on real assumptions and to assess the necessary means immediately. UBS restores confidence whereas Unicredit generates mistrust; which is killing in the finance world.  

Friday, 09.05.2008

1. We were present in Rome at Unicredit shareholders meeting. Following the provisions of the Italian Law, we have requested the Unicredit Supervisory Board's investigation on the "Project Chopin" and Profumo's conflict of interests thereof. It would be based on an independent opinion and the hearings of Mr. Profumo, Jerzy Bielewicz & Michel Marbot.
2. We have also requested the suspension of Mr. Profumo from the Board as long as the Courts has not cleared Mr. Profumo name in relation with "Project Chopin".
3. We are convinced to go ahead, having heard the abject comments of Mr. Profumo who  blattently violated banking secrecy and gained the surname of Pinocchio. In fact, talking to the Shareholders, Mr. Profumo, while he confirmed the existence of Project Chopin, denied that Unicredit ever got involved or signed it. We defied him to publish on the Unicredit website the contract signed in the name of Unicredit Italiano S.p.a. by the head of Mergers & Acquisition Department, Mrs. Natale on June the 1st, 2005. More details would be posted on this site  in "UNICREDIT MEETING" section.

Monday, 05.05.2008 

1. The Court will have to state if Pekao's dividend payout is legal. Unicredit expecting as much as €0,5 bln. During the shareholders meeting, Mr. Bielecki stated that the increase was just a tiny 7% (9,6 PLN in 2007 against 9,0 PLN in 2006); he forgot to precise that the number of shares had increased since 2006. Moreover dividends represent 125% of Pekao's net profits.
2. The Polish Consumers Protection Office (UOKiK) may fine Pekao for up to 700 M PLN (10% of the group revenues according to UOKiK) for the merger. Polish regulator probes integration of UniCredit units. CLICK
3. The Polish Financial Watchdog, KNF, decided to audit the merger of Pekao and BPH brokerage firms. In the meantime a significant number  of Pekao' clients have filed their claims against the Bank.
4. Ex BPH agents are not satisfied with the merger which obliges them to work in unsatisfactory legal conditions.

Thursday 24.04.2008

1. During yesterday's Pekao Shareholders Meeting, Mr Jan Krzysztof Bielecki defined Pekao's performance as the best ever and thus proposed the highest dividend ever. For us minority shareholders, nothing justifies such a triumphalism. In 5 months our shares price fell by a record 30% and the dividend proposed does not even cover 10% of that loss. Pekao needs to be soon recapitalised if it has to comply with the new Basel 2 minimum capital requirements. So what justifies today an agressive dividend policy? The truth is that the distribution of dividends proposed by Jan Krzysztof Bielecki only serves Unicredit's aim, which is to bleed Pekao. Mr. Bielecki even dared to propose a dividend exceeding yearly profit by 25%, which he wants to achieve by dismantling reserves in a risky environment. As much as 67% of the non-Unicredit shareholders refused to vote in favor of the dividend proposed by the Management Board (22 M votes out of 188 M of which 155 M belong to Unicredit).
2. Next Monday we shall be in Rome for the Unicredit Shareholders meeting.

Monday 23.04.2008

Here are our comments on Pekao Shareholders' Meetting of Wednesday, April 23rd.

On Pekao's Board dividend policy

The payment of record dividends by Pekao to Unicredit is not economically justified. It affects the interests of the minority shareholders as well as the stability of the Bank and its shares value.

1. Record dividends are in breach with the injunctions of the Polish Financial Control Commission (KNF), and the IMF. They affect the shares value just when Pekao needs a capital injection in order to comply with new regulations in an unsecure environment.
2. In 2007 Pekao Capital Adequacy ratio fell significantly (from 14,7 to 11,1) and it may not reach the level requested once Basel 2 is implemented. In fact the Economical Capital requirement will be higher than formerly expected and thus the payment of dividends is now wrong.
3. Unicredit wants to tap 1,5 bln from its Polish affiliate in order to cover its curent needs and is less concerned by the shares' value as it does not intend to sell its stake in a near future.
4. For the minority shareholders the payment of an annual dividend of 9,6 zlotys (€ 2,8) does not compensate at all the 80 - 110 zlotys (€ 30) shares depreciation, and infact it definitvely increases their loss. Pekao holds the record of bad shares value performance among banks.
5. The payment of dividends to Unicredit shold remain on hold until the following affairs are cleared: (a) Project Chopin; (b) Unfair BPH 280 valuation for the merger; (c) Tora bankruptcy; (d) Semil financing; (e) I.T. expenses and consultancy; (f) Real Estate disposal.

By opposing the payment of dividends we want to avoid further downgrading of our Bank by Unicredit.

On the financial statements of Bank Pekao SA for the year 2007

The financial statements presented by the Management Board of the Bank are not in conformity with legal standards and do not reflect the economical situation of the Pekao SA.

1. The Project Chopin i.e. the granting of a 25 years exclusivity right to Pirelli on the Pekao's and Pekao's customers' real estate is not disclosed nor accounted for. Moreover irregularities were committed in merging Peko and BPH 280. For these reasons Pekao's minority shareholders request a € 2,5 to 5 bln indemnity from Unicredit.
2. In 2007 the Capital Adequacy ratio fell from 14,74 to 11,13 for the Bank and from 16,51 to 12,12 for the Pekao Group. When taking into account the Economical Capital reserve imposed by Basel 2, the Bank will be below acceptable standards. The world financial crisis is making any projection even more hazardous.
3. As an effect of the merger with BPH, Pekao's Equity only grew from 9 to 13 bln zlotys while assets soared from 64 to 124 bln zlotys. In 2008 Pekao will need minimum 2 bln zlotys capital increase. If the financial crisis deepens the oportunity cost of a capital increase will by far exceed the cost of a dividends distribution today.
4. The level of imperment is obviously too low after the merger. The total loans jumped fom 38 to 74 bln zlotys while total losses impairment increased only from 3,8 to 4,8 bln zlotys thus our conclusion that 7 bln zlotys are missing. An amount that might reach 12 bln when we take into account all court cases from shareholders and clients related to the merger with BPH. If the accounts were to be exact, Unicredit would never find the source to fund its 1,5 bln dividend.

We shall reject the resolution on the adoption of Pekao's 2007 financial statements.

On the Activity Report of the Management Board of Pekao SA for the year 2007

The Management Board is dedicated to the service of Unicredit at the expense of Pekao: 

1. The merger with BPH was based on distorded accounts ignoring the Project Chopin.
2. BPH 280 (controlled by Unicredit) was spun off as if it were a self standing entity. Unicredit which had just acquired BPH from HVB-CABA got an immediate profit of € 1 bl at the expense of the minority shareholders of Pekao SA. Pekao Management and Supervisory Boards decisions were based on the so-called  „fairness opinion” of Merrill Lynch International (ML) which worked at the same time for Unicredit!
3. The Project Chopin i.e. the granting of a 25 years exclusivity right to Pirelli on the Pekao's and Pekao's customers' real estate is an abuse of rights. Our assets and customers base was transferred for free to an Italian developper linked to Mr Profumo. Our loss is at least € 1 bln. 
4. Pekao's Management is secretly abandonning its hold on the Ukrainian activities in favor of another Unicredit subsidiary violating once more its promise to the Polish Authorities.
5. Pekao bears the costs of introduction on the Polish market of the italian brand Xelion linked to Unicredit.
6. Pekao information system costs are permanently excessive and redundant.
7. The Board intends to give to Unicredit 50 % of the company providing credit cards services to Pekao's customers!

The Board's policy is simple: the costs are for Pekao and the profits for Unicredit. We require the resignation of its members.

Friday 18.04.2008

1. Unicredit Group got involved in clearly doubtful and very poltical loans guaranteed by the Polish state, for instance paid but never started blood related products factory. Was it ethical to earn this money at the expense of tax payers?
2. Pekao is still paying, through an ill-structured option, the loan of an influencial Italian client of Unicredit related to the construction of a hotel in Warsaw.
3. Pekao and small shareholders of Tora, the Italian owned producer of aluminium felloes, lost € 50 M in two years, a major scandal on the Warsaw Stock Exchange.
4. The Project Chopin highlights the true advantages for Mr. Jan Krzysztof Bielecki of possibly becoming the President of the Polish National Football Association. The latter shall have a decisive influence on the construction of new stadiums, hotels and roads in relation with the Euro 2012.  

Thursday 17.04.2008

1. Should Mr. Bielecki pay Mr Profumo € 0,4 bln dividends and ignore warnings of serious experts and of the Financial Control Commission who suggest an increase in provisions? The exposure of Pekao towards real estate developpers reached € 4,5 bln in 2007, equivalent to 6 times the yearly profits! Banks face Closer scrutiny (FT) CLICK

Wednesday 16.04.2008

1. Checks and balances found Democracy. But what happens when a Bank has the political power and has excessive influence on the goverment? When this Bank is moreover controlled by the a major foreign company that proved to cheat its own Italian nationals? Is this tolerable in Europe, in the 21st Century? Mr Jan Krzysztof Bielecki's power is occult and has today no limit. He controls the leading Bank in Poland. He forced to silence journalists of important newspapers financed by Pekao who dared to ask him unpleasent questions (if he wants us to prove it, we will). The present Minister of Finance, Mr Rostowski, still was a few months ago the main advisor of Pekao's Board and thus of Mr Bielecki himself. No surprise: the Polish Minister of Finance just gave Unicredit the mandate to organise the next 1,5 Bln Swiss Franc Sovereign obligation in the name of the Republic of Poland...and Mr Bielecki. Conflict of interests? CLICK, Jan Krzysztof Bielecki PL CLICK 
2. We warmly thank the Members of the Polish and European Parliament who promissed to take the necessary steps in order to prevent further illegal actions of Unicredit, such as the lack of informing the shareholders of a public company, the abuse of majority, the transfer of assets of the Bank to companies clearly related to its management, below market value thus generating losses for the minority shareholders and fraudulous tax evasion. We must remember that the apetite of Mr. Profumo is endless and if he had no scruples to pinch the till of Telecom Italia and of small-medium companies there is no reason to trust him when he acts outside his home-country.

Tuesday 15.04.2008 

1. Did you see the two RAI 3 "Report" programs on the derivatives and Telecom scandals? At least our brief comment gave you a taste of it. We hope the Polish "prokuratura" (public prosecutor) will now pay some interest for the case, as in Italy. Mr Bielecki is using all his power to avoid it - and he is shrewd indeed.
2. We suggest that you read the Unicredit Integrity Charter adopted (on paper) by Alessandro Profumo. His practice proves that the roads to hell are paved with good (declared) intentions. We specially appreciated the following definitions: "The aim is to make sure that a customer, when purchasing a product or service, is aware of the risk involved and understands the value of the product or service delivered to him. We should always be impartial when choosing suppliers (...)Informing the market is both an economic and a cultural value, and is carried out in a clear, complete and timely manner,(...) for each type of investor. The economic development of local communities must be carried out with sensitivity." My Goodness!  Unicredit Integrity Charter CLICK  

Monday 14.04.2008

1. We are informed that the Association of Polish Banks points out the negative impact for the customers of Pekao-BPH merger and recommends to amend the Polish Law in order to avoid such operations in the future. If you read Polish : Zła Fuzja CLICK
2. An excellent TV program in Italian (RAI 3 Report dated 15.10.2007) demonstrates the lack of morality of Mr Profumo, who sold to his customers swaps (derivatives) that he introduced as an insurance against an eventual rise of interests rates. The derivatives were instead an insurance inside a tiny tunnel with extreemely high probality of loss outside the tunnel. The product was sold by Mr. Profumo to medium-small companies or local public entities. Their loss was over € 1 bln according to the Bank and € 2,5 bln according to the victims, The program illustrates the perfect coordination between Unicredit, Merrill Lynch and JP Morgan and how those institutions could boost their profits at the expense of credulous customers. Scandalo Derivati Report RAI 3 CLICK
3. Another TV program in Italian (RAI 3 Report dated 25.03.2007) explains the Telecom Italia scandal. This state company was the richest in Italy. It was privitised in 1999. Mr Tronchetti-Provera owner of Pirelli took the controle of Telecom Italia in 2000 thanks to the support of JP Morgan which organised the financing of this transaction by selling Pirelli's Optical Technology, a US based company, at 170 times its turnnover! Till March 2007 Telecom Italia was well controlled by Pirelli with only 0,12% of the consolidated property through Olimpia SpA whose prominent Director was Mr Profumo (till October 2006 Unicredit was a shareholder of Olimpia). Telecom Italia was the first victim of the "Italian Method". In 1999 it had € 0,9 bln of debt and € 25 bln of real estate at market value. In 2006, Telecom debt had soared reaching as much as € 33 bln while the Telecom real estate fully evaporated. Under the management controle of Mr. Tronchetti-Provera and Mr. Alessandro Profumo the total capital extracted (to say the least) from Telecom Italia was € 25 bln of properties and € 33 bln of debt plus € 6 bln of dividends not resulting from any profits which sum up to € 64 bln, i.e. € 10 bln / year fade away! This astronomical amount (one and a half time the national debt of Poland disappeared in 6 years only! It resulted in a loss of the market value of Telecom Italia from € 114 bln to € 40 bln and its sale just before bankruptcy. Mr. Alessandro Profumo and Mr. Tronchetti-Provera left the command of company just 6 months before the collapse. Telecom Italia was under their supervision the tool of the biggest private spying scandal since the 2nd World War. Most of the real estate of Telecom was sold to Pirelli or to companies related to Mr Tronchetti-Provera and his friends...at very low values. We are convinced and produce evidence that Pekao is now victim of the same Profumo system, the "Italian Method" as he names it. The Scandalo Telecom Report RAI 3 CLICK
4. Mr Profumo likes football and we do not blame him for that. However on the Italian Blog of Marco Liguori and Andrealo, we find an excellent comment on the conflicts of interests of Mr. Profumo and some main Italian fottball teams. Interesting for those who read Italian. Why is Profumo using the Milan branch of HVB, the German affiliate of Unicredit) and not Unicredit itself which is present at every corner of the road, in order to finance the famous club Juventus?  Profumo e il calcio 1 (in Italian) CLICK, Profumo e il Calcio 2 (in Italian) CLICK 

Friday 11.04.2008

1. Another shareholder of PEKAO informed us that in year 2006 the Board of Pekao purchased a significant number of Pekao shares in violation of art. 156 of the Polish Government Decree regulating the Trading of Financial Instruments and prohibiting Insider Trading.
2. Our comment on the scandalous dividends' policy for Bank Pekao SA. Mr Stanislaw Kluza, Chairman of the Polish Financial Control Commission (market watchdog), clearly stated that as long as Banks do not know the real long term impact of the international financial crisis, they should refrain from distributing dividends. But Mr Profumo needs to hide the disaster in Unicredit by sucking up as much as €400 M this year from Pekao. We do not think that any cash should be distributed to Mr Profumo and his acolytes before we have a clear understanding of the Bank's situation. Dividends should not be paid to the majority shareholders but left in, in order to avoid the collapse of our shares value and restore the market confidence in the ethical management of our Bank.  If you read Polish please go to Wersja Polska CLICK
3. We hear that the Trade Unions of the Bank are in direct conflict with Pekao CEO Mr Bielecki who stated publicly that salaries across the company increased by more than 20% in 2007. According to the Trade Unions it is not true. Mr Bielecki was probably referring to the 28% hike in Mr Lovaglio's declared remuneration.