If the negotiations between UniCredit and Banca Monte dei Paschi (BMPS) appeal to investors, they worry the Italian political class. This echoes the fears of the unions who fear the elimination of 2,500 jobs in Tuscany alone and demand that the jobs of the 21,000 employees of the group be guaranteed.
“We don’t agree with the idea of breaking up the bank. The territorial roots of MPS in Tuscany, its workers and its brand must be safeguarded, ”Antonio Misiani, economic leader of the Democratic Party (PD), who participates in the government, told Reuters.
According to estimates by the FABI union, UniCredit could cut 1,250 of the 1,400 BMPS branches and 5,500 jobs. The hundred or so remaining branches could be taken over by Mediocredito Centrale, which already controls the People’s Bank of Bari, thus creating a banking center in the south of the peninsula.
The Italian state shareholder
The government of Mario Draghi, which has given itself forty days to negotiate an agreement, sees no alternative to this sale, imposed by the European Commission as part of the BMPS rescue in 2017 for 5.4 billion euros . The Italian state still owns 64% of the listed bank.
“We will not conclude an agreement at any price, but will find a positive solution for the city of Siena and Tuscany,” the Minister of the Economy, Daniele Franco, defended Wednesday evening. Monte dei Paschi is the oldest bank in the world and preserving this brand, which has not only historical but also commercial value, is our priority ”.
Speaking to Parliament’s finance committee, Daniele Franco retraced the steps that brought BMPS to the brink of bankruptcy. He assured that the sale of BMPS, which must take place no later than April 2022, will be a “market operation which will not mean selling off state property by carrying out a cut-to-size sale”.
UniCredit, however, imposed drastic conditions. Like his predecessor Jean-Pierre Mustier, the new boss of the Italian bank Andrea Orcel does not want to recover the 4 billion euros bad debts of BMPS, nor his legal liabilities while minority shareholders claim 10 billion euros.
The regional bank, badly rated in the latest stress tests of the European Central Bank (ECB), estimates its lack of equity at 2.5 billion euros. It published Thursday a net profit of 202.1 million euros in the first half, against a loss of 1.08 billion in the same period of 2020.
A merger with UniCredit would be welcomed by Carlo Messina. The boss of the first Italian bank, Intesa San Paolo, hopes for an acceleration of the consolidation of the banking sector to “arrive at the creation of at least three poles. There is enough space for them to compete. Anything that can stabilize the system in the current phase is a good thing. “