Published by Global Banking & Finance Review®
Posted on August 6, 2025
3 min readLast updated: January 22, 2026
Add as preferred source on GoogleMonte dei Paschi raises profit outlook after a strong quarter, determined to acquire Mediobanca despite opposition. MPS's capital reserves increased, aiding its acquisition strategy.
By Valentina Za
MILAN (Reuters) -Italy's Monte dei Paschi di Siena on Wednesday raised its profit forecast for the year after much higher than expected second-quarter profit and said it was determined to buy bigger rival Mediobanca.
Monte dei Paschi's (MPS) 16 billion euro ($19 billion) all-share buyout offer for Mediobanca, which runs until September 8, is one of a dozen takeover bids reshaping Italian banking.
Capital reserves, which MPS can tap to sweeten its offer, increased sharply in the quarter.
CEO Luigi Lovaglio ruled out the idea of MPS abandoning the bid, given Mediobanca's strong opposition, and reviving instead an earlier project to combine with Banco BPM, which has recently freed itself from UniCredit's grip.
"We're quite determined ... to build the third competitive force in the Italian landscape," Lovaglio told analysts.
BPM said on Tuesday it could look at MPS, of which it already owns 9%, as it weighs tie-up options, but only after the Mediobanca bid concludes.
MPS said net profit in the three months through June totalled 479 million euros ($554 million), compared with a 349 million euro forecast in a company-provided analyst consensus.
At 1.05 billion euros, revenues were up 4% versus the previous quarter, with trading income jumping by a third, net interest income up despite falling rates, and net fees also rising. Analysts had looked for revenues of 982 million.
MPS was rescued by the state in 2017 and has since restructured under Lovaglio.
Like other Italian lenders, it has seen earnings lifted by higher interest rates in recent years, while also benefiting from the release of cash set aside against legal risks after favourable court rulings.
With profits recovering after years of losses, MPS has been able to tap into tax credits to support earnings. It is counting on such a boost to reward Mediobanca's shareholders once it can add the target's income to its own accounts.
MPS said its core capital ratio stood at 19.6% of assets, one of the highest in the industry, which could give it room to improve the Mediobanca bid.
To fight MPS' offer, Mediobanca is attempting to buy private bank Banca Generali and has called a shareholder vote on August 21 on the plan. It had been forced to postpone an earlier vote for fear it would fail to receive sufficient investor support.
($1 = 0.8639 euros)
(Reporting by Valentina Za. Editing by Jan Harvey and Mark Potter)
An acquisition is a corporate action in which one company purchases most or all of another company's shares to gain control of that company.
Capital reserves are funds that a company retains for future use, often to strengthen its financial position or to finance future investments.
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