Banca Monte dei Paschi di Siena (BMPS) has announced it is evaluating a range of options to protect its independence, with its CEO questioning the impact of a €35 billion takeover bid from UniCredit on the world's oldest bank and the broader Italian economy.

CEO Luigi Lovaglio stated on Friday that the bank possesses a capital buffer which provides flexibility for growth, shareholder returns, and the assessment of strategic opportunities. He noted that its 13.3% stake in insurer Assicurazioni Generali is considered a "cherry on top" asset, but acknowledged it has attracted interest from multiple market participants. Lovaglio added that BMPS is also open to evaluating potential strategic opportunities with rival Mediobanca.

In June, BMPS became the target of a cash-and-stock takeover bid from its larger competitor, UniCredit. Mediobanca initially proposed a rival merger, but abandoned negotiations last week after its largest shareholder, Crédit Agricole, questioned the benefits of the deal.

These developments place BMPS, widely regarded as the oldest bank still in operation, at the centre of Italian banking consolidation. The bank has been recovering from a government bailout in recent years and has sought to expand its operations by acquiring Mediobanca last year.

Lovaglio reiterated concerns previously raised by BMPS's board regarding UniCredit's offer and other risks associated with the transaction during a call with analysts.

Lovaglio expressed support for acquisitions that strengthen Italian banking participants, but argued that the sector's diversity must be preserved. "National champions should enhance the country's competitive landscape, not weaken it," he said. "Otherwise, the crown may become bigger, but the kingdom smaller."

UniCredit declined to comment on Lovaglio's stance, instead citing recent remarks by its CEO, Carlo Messina, who stated that the offer aims to create a stronger and more profitable group.

Lovaglio indicated that BMPS's review of strategic options is designed to maximise long-term value for all stakeholders and to avoid the dismantling of its branch network. Under UniCredit's proposal, BMPS's brand and approximately 635 branches would be sold to Assicurazioni Generali, while UniCredit would retain around 625 branches and the Mediobanca business.

Lovaglio highlighted that BMPS's integration of Mediobanca is ahead of schedule, and the bank expects to exceed its synergy targets this year while continuing to grow its market share. The bank has raised its 2026 pre-tax profit guidance to €3.6 billion (approximately $4.15 billion), up from a previous forecast of over €3.5 billion.

BMPS reported that its second-quarter net profit surged to €610.2 million from €479.4 million in the same period last year. The bank restated the prior-year figures to include Mediobanca's performance in the period before its acquisition. Second-quarter revenue increased to €2.06 billion from €1.96 billion. Net interest income was broadly flat at €1.06 billion, while net fee and commission income rose 9.0% to €670.1 million. The bank attributed the growth in fee income to its corporate and investment banking and asset management businesses. Its CET1 ratio, a measure of capital strength, rose to 16.3% as of June 30, from 15.9% three months earlier.

The article is sourced from Sina Finance. Editor: Zhang Jun SF065.