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Italian bank CEO to Bridgewater’s Dalio: You will lose your multi-million dollar bet against my company

  • The world's largest hedge-fund firm Bridgewater Associates, has mounted a reported $713 million wager against Italian financial stocks.
  • Intesa Sanpaolo CEO Carlo Messina said that the Ray Dalio, who runs Bridgewater, was going to lose money on his bet.

Intesa Sanpaolo CEO Carlo Messina has said a multi-million dollar bet against his company is doomed to fail.

The world's largest hedge-fund firm Bridgewater Associates, has mounted a reported $713 million wager against Italian financial stocks. Its biggest bet is calculated to be against Intesa Sanpaolo.

The short position, which aims to profit on a fall in the bank's shares price were disclosed in regulatory filings and reported by Bloomberg on Friday.

Intesa Sanpaolo CEO Carlo Messina said that the Ray Dalio, who runs Bridgewater, was going to lose money on his bet.

"So I have to tell you that in my view they will lose significant opportunity to make money with these good Italian shares," he told CNBC on the sidelines of the International Monetary Fund meetings in Washington D.C.

Carlo Messina, Intesa Sanpaolo’s CEO
Simon Dawson | Bloomberg | Getty Images
Carlo Messina, Intesa Sanpaolo’s CEO

"And today after this news my share price is the only one that is positive and all the others negative so I hope that each day they can give this advice to the investors," he added.

Messina claimed Intesa was in a strong position and pointed to the bank's 920 billion euros ($1.09 trillion) of retail deposits that would benefit from any future era of rising interest rates.

Italy's bad debts

According to figures from the IMF (International Monetary Fund), Italy's NPL levels stood at 356 billion euros at the end of June of last year, corresponding to 18 percent of total loans for Italian banks, equivalent to 20 percent of Italy's GDP and one-third of the euro area total for NPLs.

Italian policymakers and EU officials have been trying to deal with the country's fragile banking system, bogged down by non-performing loans (NPLs).

Messina agreed that speeding up the reduction of NPLs was positive, but said too many different European agencies were looking at the situation from different perspectives.

"I'm really disappointed by the fact that you have the ECB (European Central Bank) saying something, parliament saying something different, commissions, Eurogroup, IMF ... So a lot of players that are dealing with something that is absolutely price sensitive," he said.

Banking clean up

Italy began winding up two failed regional banks in June in a deal that committed up to 17 billion euros ($19 billion) of public money and put the lenders' good assets in the hands of Intesa Sanpaolo.

The government will pay 5.2 billion euros to Intesa, and give it guarantees of up to 12 billion euros, so that it will take over the remains of Popolare di Vicenza and Veneto Banca.

Now Intesa is again part of the rescue of another bank, Carige, which has been given until the end of 2017 to strengthen its balance sheet. That deadline imposed by the ECB.

CEO Carlo Messina said the bank was making the best of a bad situation after buying the low-ranking debt of Banca Carige in 2010.

"Having this subordinated debt in the portfolio, the best way to reduce the negative impact is to convert into senior debt so there is a minimum loss," he said.