Marketing strategies in the newly competitive Italian banking sector are becoming increasingly bizarre - the latest ploy is a lottery linked to a bond issue that offers Porsche cars as prizes.
With bonds at record lows, Banco Ambrosiano Veneto, which with Cariplo forms Banca Intesa (Italy's third-largest banking group), has decided to tap Italians' passion for raffles to lure investors into a L350 billion ($215.5 million) issue.
Sold to retail last month, the six-year bonds' yield was nothing special, at 3.5% a year (3.08% after tax), compared with government paper of the same maturity that offered a yield of 3.3% after tax.
But for every L5 million underwritten, the investor will be given a number to be drawn in a lottery in October 1999. The first three prizes will be gold coins (worth L500 million, L200 million and L100 million), and the fourth, fifth and sixth prizewinners will each win a Porsche Boxster worth around L90 million.
"We did not want to compete on the prices or to use complicated rules such as step down or step up. This is an issue for retail customers that aims to reach the less traditional and younger kind of investor," says Victor Massiah, head of marketing at Ambroveneto.