Infotech

Italian politicians hail the failure of UniCredit’s takeover of BMPS



Posted on Oct 25, 2021, 1:19 PM

We will not sell Banca Monte dei Paschi di Siena (BMPS) at any price “, Minister of the Economy Daniele Franco had promised this summer before the finance committee of the Italian parliament. The one demanded by UniCredit was too high for the Italian taxpayer.

Sunday evening, the Italian Treasury, which manages the state’s 64% stake in BMPS, and the banking group announced the failure of negotiations. To take over the oldest bank in the world, UniCredit had requested about 7 billion euros from the state, an amount three times higher than the initial estimate of the Treasury.

The list of pitfalls in a difficult negotiation was long. In addition to the issue of capital, the management of bad debts and legal problems with shareholders obviously included that of the reduction of about a third of the payroll with the elimination of 7,000 jobs.

Too “punitive” conditions

Too “punitive” conditions for the Draghi government, which preferred to put an end to the discussions. An announcement that was welcomed by a large part of the Italian political class, starting with the secretary of the Democratic Party, Enrico Letta, who has just been elected deputy for Siena.

I have the impression that UniCredit thought that BMPS would be sold off, other options will now present themselves to protect the brand, the unit of the bank which must not be sold cut to size and the jobs », Declared the former former president of the Council.

An opinion shared by the League and the M5S. These populist parties who shouted ” Victoire By learning about the failure of negotiations to which they have always opposed. But the question of the future of the bank remains intact and its rescue worries.

In more than a decade of crisis, capital increases and public aid have already cost the Italian taxpayer around thirty billion euros. The transalpine press evokes the specter of a ” Alitalia banking », A company without a future which represents a financial pit for the state coffers.

New deadline

The Minister of the Economy will soon be summoned by the Parliament’s finance committee to take stock of the matter. Rome has agreed with Brussels on a deadline in mid-2022 to “re-privatize” the establishment and will ask for an extension of at least six months of this deadline.

The end of discussions with UniCredit is good news, welcomed the president of the Tuscany region, Eugenio Giani. BMPS can do this on its own without being incorporated into another bank “. An optimism that not all share. Rumors of a takeover by Banco BPM or Crédit Agricole have been revived.

Lando Sileoni, general secretary of Fabi, the main trade union in the Italian banking sector, deplores the failure of the negotiations. ” They suffered from a hostile climate with three quarters of the political forces that opposed them, he explains. We had to ask Europe a year ago to extend the deadline to put BMPS back on the market. But now it must be clear that we will not accept any reduction in staff which is not made on the basis of voluntary early retirement. We will oppose by all means any social breakage “.

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