Banca Monte dei Paschi a “huge problem”, according to the Italian League
CERNOBBIO, Italy, Sept. 5 (Reuters) – Italy’s Banca Monte dei Paschi (BMPS.MI) is a “huge problem,” the leader of the right-wing League party said on Sunday, expressing concerns over a possible sale of the Tuscan bank to bigger rival UniCredit (CRDI.MI).
After taking control of Monte dei Paschi (MPS) in 2017 after a € 5.4 billion ($ 6.3 billion) bailout, the Italian Treasury pledged to hand over the oldest bank in the world in private hands by mid-2022, with Rome now trying to negotiate a merger with UniCredit.
“The solution could be a merger, but not a sale to UniCredit,” the League’s Matteo Salvini told reporters on the sidelines of an annual trade conference in Cernobbio on Lake Como.
The Treasury is expected to take time and push for a reconciliation with Italian banks that focus on lending to small and medium-sized businesses instead of rushing to sell it to UniCredit, Salvini said.
“MPS and other local banks could create a third banking group,” Salvini said, hinting at a possible tie-up with Banca Carige (CRGI.MI) and other regional lenders in southern Italy.
The leader of the League party, which is part of the ruling coalition, said a merger between UniCredit and MPS could lead to 7,000 job cuts and the closure of 300 branches.
MPS posted better-than-expected second-quarter results last month, but said it still plans to raise € 2.5 billion in cash next year if it can’t find a buyer.
Salvini said it would make sense for the Treasury to inject additional funds into MPS if it were to put the bank back on the market in the medium term.
The bank’s hometown of Siena, like the rest of central Tuscany, is a traditional stronghold of the center-left PD party, which has often been criticized for contributing to the Tuscan lender’s problems.
Salvini reiterated his previous harsh criticism of PD and said the party should take responsibility for the lender’s woes.
Reporting by Francesca Landini Editing by David Goodman
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