Italy's Strategic Moves: Monte dei Paschi di Siena's Future Hangs in Balance

The Italian government is considering selling its stake in Monte dei Paschi di Siena but won't rush the sale. Prime Minister Giorgia Meloni emphasizes the potential benefits of a banking merger. Investigations are ongoing into MPS's recent acquisition activities, but there are no allegations of illegal conduct.

Prime Minister Giorgia Meloni has indicated that the Italian government is open to selling its remaining stake in Monte dei Paschi di Siena (MPS) but is not hurrying the decision. After acquiring 68% of MPS in a 2017 bailout, Italy has reduced its share to 4.9%, primarily through share placements.

Meloni discussed the possibility of a future merger to reduce the stake further, aligning with long-term plans to merge MPS with Banco BPM. She highlighted the potential creation of a third major banking entity in Italy, enhancing competition for leaders like UniCredit and Intesa Sanpaolo, but acknowledged the government's limited influence due to its smaller stake.

Addressing an ongoing investigation by Milan prosecutors into MPS's acquisition of Mediobanca, Meloni stated her lack of concern, noting the prosecutors' assurance of no illegal actions by the government. The investigation involves MPS CEO Luigi Lovaglio, and the bank's major shareholders, amidst concerns of undisclosed coordination.

(With inputs from agencies.)