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Italy offloaded another 15 per cent stake in Monte dei Paschi di Siena on Wednesday, using the staged privatisation of the once-ailing lender to kick-start a consolidation process in the country’s banking sector.
Shares in the world’s oldest bank jumped more than 12 per cent on Thursday after the €1.1bn sale by the government, which cut its stake from 26 per cent to just over 11 per cent.
The sale brought in MPS’s Milan-based rival Banco BPM as a shareholder, which bought a 5 per cent position after the market closed on Wednesday. Asset manager Anima, which backed Monte dei Paschi’s complex cash call two years ago and whose single largest shareholder is also Banco BPM, also said it took a 3 per cent stake.
But the sale also brought in other prominent investors in Italy’s financial sector.
Delfin, the billionaire Del Vecchio family holding company, and the Rome-based Caltagirone group, took stakes of about 3 per cent each, according to people familiar with the process.
Both Delfin and Caltagirone are large shareholders in Milan-based lender Mediobanca and insurer Generali. Delfin and the Caltagirone group both declined to comment, but the investors have four days to disclose their holdings if they have crossed a 3 per cent threshold.
The sale caps a complex restructuring process at MPS overseen by chief executive Luigi Lovaglio, and reflects how the lender and the government have prioritised a turnaround over a swift exit.
The Italian government stepped in to rescue MPS in 2017 by handing over €5.4bn in exchange for a 70 per cent stake, marking Italy’s biggest bank nationalisation since the 1930s.
The state held as much as 64 per cent of the bank’s shares as recently as last year, but has been reducing its ownership as part of an agreement with EU authorities to return the lender to private ownership.
The government has opted to sell down in stages to maximise returns for taxpayers. Total proceeds from the MPS stake sales amount to some €2.7bn.
The latest sale sets in motion a consolidation process within Italy’s banking sector, which Giorgia Meloni’s government hopes will complete with the creation of a third large banking hub in the country after Intesa Sanpaolo and UniCredit.
Although BPM said it had no plans to request permission to exceed a 10 per cent holding in MPS, analysts at Keefe, Bruyette & Woods said the market was “likely to speculate that [BPM] could be interested in acquiring a controlling stake . . . in the future”. They added that “such a scenario could be favourable to both banks”.
Despite producing bumper profits and shareholder returns over the past two years, European lenders are under pressure to cut costs and find new revenue sources as interest rates fall. One option is to merge with rivals, which can produce cost savings and economies of scale.
The Italian Treasury said on Wednesday it had placed the MPS shares at €5.792, a 5 per cent premium on Wednesday’s closing price.
