Published by Global Banking & Finance Review®
Posted on January 19, 2026
3 min readLast updated: January 19, 2026
Add as preferred source on GoogleItaly's Treasury supports Luigi Lovaglio for Monte dei Paschi CEO amid board challenges and a judicial probe into the Mediobanca deal.
By Giuseppe Fonte and Valentina Za
ROME, Jan 19 (Reuters) - Italy's Treasury is in favour of reappointing Luigi Lovaglio as chief executive of Monte dei Paschi di Siena (MPS), two sources familiar with the matter said on Monday, at a critical juncture for the bailed-out Tuscan lender.
After leading the bank since 2022 through a restructuring that culminated in last year's takeover of bigger rival Mediobanca, Lovaglio, 70, is seeking a new mandate from the MPS board in April.
His reappointment faces hurdles. The board is still debating whom to put forward as a CEO candidate, amid shareholder disagreements and a judicial probe is in progress into the Mediobanca deal.
Asking not to be named due the sensitivity of the matter, the sources said the Treasury had so far supported Lovaglio's strategy for the bank and wanted MPS to continue along its current path.
GOVERNMENT STANCE ON LOVAGLIO KEY DESPITE SMALL STAKE
Italy's Treasury, which has a residual 4.9% stake in MPS, would not back any slates of board nominees with an alternative CEO candidate, the sources said, adding Rome would be in favour of naming some new directors.
With the country's financial sector still in flux, the government's stance carries weight beyond the actual size of its shareholding.
In reprivatising MPS after a 2017 bailout, Italy has brought onboard as key investors Delfin, the holding company of the Del Vecchio family, and construction tycoon Francesco Gaetano Caltagirone.
Delfin on Friday threw its weight behind Lovaglio, saying it backed the bank's management. Caltagirone, however, has not expressed his support for the CEO and sources say he has doubts about whether Lovaglio would be the best choice going forward.
Caltagirone on Friday denied any direct clash with Lovaglio, attributing the uncertainty over the CEO's future to an internal board debate.
By acquiring Mediobanca, the main shareholder in Italy's largest insurer Generali alongside Delfin and Caltagirone, MPS has positioned itself at the centre of the country's financial system.
Decisions over the bank's leadership are seen as critical in shaping the sector's future.
Reuters reported in November that Rome was still banking on a long‑standing plan to combine MPS with rival Banco BPM.
Bankers expect further consolidation in Italy's financial sector following a raft of merger deals last year, with Generali seen as a central pivot in any reshaping of the market.
The insurer in December ditched an asset management deal with France's BPCE after sharp criticism from Italy's government and top shareholders Caltagirone and Delfin.
Lovaglio, who has described the Mediobanca merger as an innovative combination of two markedly different lenders, is working on a strategy for the group which must be presented to the European Central Bank within six months of the deal.
(Reporting by Giuseppe Fonte in Rome and Valentina Za in Milan, editing by Gavin Jones)
Corporate governance refers to the systems, principles, and processes by which a company is directed and controlled. It encompasses the mechanisms through which companies, and their stakeholders, are held accountable.
A financial institution is an establishment that provides financial services, such as banks, credit unions, insurance companies, and investment firms, facilitating transactions and managing money.
Key investors are individuals or entities that hold significant stakes in a company and have a substantial influence on its operations and decisions, often providing necessary capital and strategic guidance.
A judicial probe is an official investigation conducted by a court or legal authority to examine the facts surrounding a particular case, often involving allegations of wrongdoing or legal violations.
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