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UPDATE 1-Europe's biggest online broker Fineco rises on market debut
July 2, 2014 / 11:01 AM / 3 years ago

UPDATE 1-Europe's biggest online broker Fineco rises on market debut

* Shares rise more than 8 percent in early trade

* UniCredit pockets 673 mln euros from the IPO (Adds Fineco CEO comment, profits from sale, share offer breakdown, detail)

By Elisa Anzolin

MILAN, July 2 (Reuters) - Shares in online bank Fineco , a unit of Italy’s biggest lender by assets UniCredit , rose more than 8 percent on their Milan stock exchange debut on Wednesday, the second-largest market listing in Italy so far this year.

Fineco, Europe’s biggest online broker by order volumes, priced its shares last week at 3.7 euros apiece, giving it a market capitalisation of 2.24 billion euros ($3.06 billion).

In the sale, UniCredit pocketed 673 million euros, with a capital gain of around 360 million euros that it will put aside to bolster its capital.

Like other Italian lenders, UniCredit is trying to keep a lid on defaulting bank loans as the country struggles to emerge from its longest recession in 70 years, and has been looking at ways to boost capital and offset writedowns.

Fineco’s shares gained more than 8 percent as they started to trade. At 1045 GMT, they were trading at 3.92 euros, up 6.1 percent. Under the current share offer, UniCredit retains a 70 percent stake in the business.

“It was a difficult market because there were a lot of deals going through, despite that we have found great demand,” Fineco CEO Alessandro Foti said at an event marking the launch of the initial public offering (IPO).

Fineco said in a presentation last month it was well placed to tap into the potentially lucrative Italian market, where 3.7 trillion euros of household wealth are invested in financial assets. That represents around 40 percent of total household wealth, compared with 60 percent in other major economies.

Demand for Fineco shares exceeded the offer by 2.9 times in the IPO which ended this week, UniCredit said on Tuesday. The offering was fully covered three days into the share sale that began June 16.

Trying to capitalise on more favourable investor sentiment towards southern Europe, a raft of Italian companies are trying to raise cash via debt and share issues, including Banca Monte dei Paschi di Siena’s successful 5-billion-euro capital increase that was concluded last week.

But investors are starting to become more picky, as shown by the decision of shipmaker Fincantieri last month to downsize its share sale. Fincantieri starts to trade in Milan on Thursday.

UniCredit is not currently considering selling down its remaining stake in Fineco, its CFO Marina Natale said, adding it was satisfied with the outcome of the IPO.

One third of Fineco’s turnover comes from investment services, with the rest from online banking and broking services.

The banks coordinating the share offer - Unicredit, UBS and Mediobanca - could decide over the next few days to sell another chunk of Fineco, cutting UniCredit’s stake in the online business to 65.5 percent.

Hedge fund Algebris Investments’ CEO Davide Serra said this week his fund would emerge as one of the top shareholders in Fineco when stock market watchdog Consob publishes regulatory filings.

Approximately 90.5 percent of the shares were allocated to domestic and foreign institutional investors, while the rest went to retail investors, according to details of the offer published on Tuesday.

$1 = 0.7331 Euros Additional reporting by Francesca Landini and Oleg Vukmanovic; Editing by Mark Potter

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