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Venerable Italian Bank Mulls Merger As State Prepares Spin-off - Media

Editorial Staff, 3 July 2020

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Rome owns 68 per cent of the Tuscan bank after an €8 billion ($8.96 billion) rescue in 2017. It has promised the European Commission that it will return the bank into private hands in 2021. 

Italy’s Banca Monte dei Paschi di Siena is looking at a potential merger deal, including with Banco BPM, Reuters reported earlier this week.

It said that Italy’s Treasury Ministry has drafted a decree to sell its controlling stake in the bailed-out bank.

Rome owns 68 per cent of the Tuscan bank after an €8 billion ($8.96 billion) rescue in 2017 and it has promised the European Commission that it will return the bank into private hands in 2021. 

Banca Monte dei Paschi, whose services include private banking, traces its origins to the middle of the 15th century when it was was founded in 1624.

The government has drafted a decree, which needs to be supported by Prime Minister Giuseppe Conte, authorising it “to proceed with the extraordinary operations” to shed its Monte dei Paschi stake.

Reuters reported that the decree said the Treasury would aim to sell its holdings “in one or more stages, through one or more public offerings, reserved for Italian retail investors, including Monte dei Paschi employees, as well as institutional investors.” A merger deal is also possible, the newswire said, citing unnamed sources.

The story casts light on the country’s fragmented banking system, often feared to be financially weak and a potential serious fault-line in the eurozone. 

The news service said that the Treasury was not available for comment. Monte dei Paschi also declined to comment. A spokesman for Banco BPM reportedly said that the bank “flatly denies any talks regarding a deal with MPS.”

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