Will banks help Italian companies abroad?

Laura Oliva Interviews Leave a Comment

The survey, designed and developed by eKuota (the full text of the survey is located here), is an analysis of the Italian economic and business world who does not give up and decide to invest where there are opportunities for development. And today these opportunities are especially abroad.
Qualità Servizi Finanziari
The financial services evaluations by entrepreneurs is quite critical. The attitude of the banks is seen as “provincial” and “of poor support”, with respect to the propensity to operate in international markets and the ability to produce in other countries. These are the results of the survey that eKuota promoted among the Italian companies active abroad.

About the question regarding the quality of financial services, the answers are relatively positive compared to the corporate financial services, for what concerns the “local presence” and “currency management”. In both cases (on a descending scale: excellent, good, fair, poor, very poor), outweigh those who answered “fair”. Stands, however, the absence of “excellent”.

The judgment is rather negative for matters relating to: “administrative, legal & tax” and “breadth of services”. The sample then gives a formal rejection of the service “credit”, where the predominant evaluation is “poor”.

Foreign currencies and commodities

The sample shows that the needs of small and medium-sized enterprises are the “classic” ones. In fact, in keeping with their manufacturing vocation, Italian companies belonging to the sample treat all the most important industrial metals:

  • steel (77.8% of cases);
  • copper (37%).
  • aluminium (44.4%).

These are the first three items, but there are others with lower rates including: silver, nickel and zinc.

Materie Prime

The U.S. Dollar, the worldwide currency for international payments, also remains by far the most important currency (88.5% of the cases under consideration) for Italian companies operating abroad. The list continues with: British Pound (23.1%), Swiss Franc, Chinese Renminbi, Brazilian Real (all 15.4%) and Australian Dollar (11.5%). Following Russian Rouble, Japanese Yen, Canadian Dollar and Turkish Lira.

Valute estere

Fresh money and investments

As we have seen, small and medium-sized Italian manufacturing firms give a final judgment on the support provided by the banks. It is good only as far as the physical presence in specific areas and standard services, such as those relating to the management of currencies. Everything else is negative, in particular the ability/willingness to support the funding.

In a brief, the presence is not enough, there is much to be done, and they need fresh capital. Especially in export financial tools and internationalization support.
From the responses of the sample, two additional elements catch the eye. First, the apparent lack of ability of the Italian national banking system to support companies, in terms of raising finance. Secondly, companies show a keen interest in other and more enduring forms of financing, such as private equity (investors in equity) and minibond (an innovative financial instrument similar to bonds).

The sample shows great interest in “private equity” (60.9%), followed by “mini bond /commercial papers” (26.1%), “bond issue” (17.4%), “public equity” 13%, “real estate investment funds” (8.7%).

Mercato dei Capitali

This result indicates two key points.

The first: the Italian companies are hungry for fresh money.

The second: companies need for medium and long term funding.
Both of these requirements are intended for business growth.

 

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About the Author

Laura Oliva

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Co-founder of eKuota. Degree in Corporate Finance from the Universita’ Luigi Bocconi in Milan, she has more than a decade of experience in capital markets. She was Head of Debt Capital Markets within the Allianz Group, she worked at a number of international investment banks. She was Global Product Specialist, Head of Structured Finance and ABS team, Head of Syndication and Credit Analyst. She managed and executed bond issues and loans syndication for major italian companies. She is a Fixed income and Securitization expert, she deals with financial analysis and financial markets. Co-Author of the AdviseOnly blog. Mom of three, born in Rimini now she lives happily in Milan.

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