Italian bank MPS considers bid defence options after beating profit forecasts
Monte dei Paschi di Siena's Strategic Moves and Financial Performance
Quarterly Profit Exceeds Expectations
MILAN, Aug 7 (Reuters) - Italian bank Monte dei Paschi di Siena (MPS) beat quarterly profit expectations on Friday and said it continues to study strategic options to fend off a takeover bid from rival Intesa Sanpaolo.
Background: State Bailout and Reprivatisation
Bailed out by the state in 2017 and reprivatised in 2023/24, Monte dei Paschi dominated the consolidation wave that swept Italian banking last year by managing to buy larger peer Mediobanca.
Takeover Bid by Intesa Sanpaolo
Intesa's Acquisition Plans
In June it became a takeover target for Intesa, which is preparing to launch a €36 billion ($42 billion) cash-and-shares bid.
MPS's Financial Strength
MPS, Italy's third-largest lender, said net profit for the three months to June 30 totalled €610 million, far above a €543 million consensus analyst estimate gathered by the bank.
Defence Strategies and Alternatives
Exploring Strategic Options
MPS said it was working with advisers to examine alternatives to the Intesa bid in the best interest of its stakeholders, adding that it has "strategic flexibility" thanks to a core capital ratio of 16.3%, almost seven percentage points above regulatory requirements.
Challenges in Defensive Strategy
The bank's defensive strategy suffered a blow a week ago when Banco BPM said it was abandoning a potential tie-up project. BPM had rushed to invite MPS to merger talks just as Intesa prepared to unveil its bid.
Revenue Growth and Integration
Revenue Performance
MPS revenue was slightly ahead of forecasts at €2.07 billion, helped by robust lending growth and fees from corporate and investment banking, an area of business strengthened by the purchase of Mediobanca.
Integration of Mediobanca
Timeline for Completion
The integration of Mediobanca is expected to be completed in the fourth quarter, MPS said.
Additional Information
($1 = 0.8678 euros)
(Reporting by Valentina ZaEditing by David Goodman)
