Italy Plans to Exit Remaining Bank Stakes as M&A Activity Accelerates
Government Strategy and Market Developments in Italian Banking Sector
By Giuseppe Fonte
Government's Plan to Unwind Bank Stakes
ROME, July 15 (Reuters) - Italy will soon unwind its stakes in domestic lenders, Economy Minister Giancarlo Giorgetti said, indicating Rome is close to selling its 4.9% shareholding in bailed-out lender Banca Monte dei Paschi di Siena (MPS).
Remarks at ABI Meeting
Speaking at the annual meeting of Italy's banking lobby ABI in Rome, Giorgetti also said the government was carefully monitoring developments in the ongoing Italian banking M&A wave, an apparent nod to the €30.6 billion ($35 billion) cash-and-share bid from Intesa Sanpaolo (ISP) for MPS.
"I am confident that this will be the last ABI meeting in which the government is a shareholder in some major banks, as the role played by the public shareholder has come to an end," he said.
Details on MPS Stake Sale
Giorgetti last month said an accelerated bookbuilding procedure (ABB) would be "one of the best solutions" to cut Italy's stake in MPS, while sources familiar with the matter said the Treasury had explored such an option just before Intesa made its bid official in early June.
At current market prices, the state stake in MPS is worth €1.7 billion.
Implications for M&A and Market Neutrality
Consistency with Government’s Neutral Stance
A divestment from MPS before Intesa's bid starts would be consistent with the government’s stated "neutral stance" on banking M&A moves.
Other Potential Mergers
Banco BPM, Italy's fourth-largest bank, also said it wanted to open talks with MPS about a potential merger.
Comments from BPM CEO
"I think it’s precisely so as not to influence" the consolidation process, BPM CEO Giuseppe Castagna told reporters, when asked about Giorgetti's remarks.
Return of BDM to Private Hands
Italy has also taken steps to return to private hands BDM, a small bank rescued in several steps since late 2019.
Broader Impact of Banking Consolidation
Enhancing International Profile and Innovation
The minister also said consolidation should improve the banking system's ability to enhance the international profile of Italian companies and encourage investment in technology, security and innovation.
Bank of Italy’s Perspective
Speaking at the same event, Bank of Italy Governor Fabio Panetta said mergers should preserve "competition, pluralism and banks' responsiveness to the needs of the real economy."
Additional Information
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(Reporting by Giuseppe Fonte, editing by Alvise Armellini and Keith Weir)
