Banca Monte dei Paschi di Siena SpA

PLEASE REFRESH PAGE
To view updates

HOME

 
Monte dei Paschi di Siena is one of the main banks in Italy. It is the flagship of the MPS Group, which is a leader on the domestic market in terms of market share. Monte dei Paschi, familiarly called "il Monte," was founded in 1472 under the auspices of the Republic of Siena.

It became the ideal heir of Siena's prestigious medieval mercantile and banking traditions, developing an efficacious system of credit to the advantage of the local economy.

The public character of the Monte was confirmed with the reform of 1624, which equipped the bank with progressive banking structures. On this occasion, the Medici Grand Duke granted depositors state guarantees on their money by entailing the income from the state-held pasture lands in the Maremma (the "Paschi" which gave the bank its name).

It is especially meaningful that the Grand Duke asked in return to be indemnified by the entire citizenry of Siena for any losses he might incur. On this foundation, Monte dei Paschi was able to consolidate and increase its banking activity in the seventeenth and eighteenth centuries. Thus the bases were created for its considerable expansion right after national unification, and even more significantly in the twentieth century.

In 1995, by decree of the Minister of the Treasury, the banking firm was transformed into a corporation called Banca Monte dei Paschi di Siena. The Bank operates, also through its subsidiaries, in the various sectors of banking and finance, from traditional banking to special credit to asset management, insurance, and investment banking, with more than 1,900 branches all over Italy and a presence in the world's major economic and financial centers.


The Monte has a strong retail vocation (families and small and medium businesses) that helps to make it the "bank of reference" in all the areas in which it is active. Since June 1999, Banca Monte dei Paschi di Siena shares are traded on the Mercato Telematico Azionario (screen-based trading market) of the Italian Stock Exchange, and since September 1999 it is listed on the market's most representative index, FTSE MIB.

http://english.mps.it/aboutus/Pages/default.aspx
 
Italian Banks Hit Reset as Taxpayer Billions Bail Out Lenders
By Edward Robinson
and Sonia Sirletti
July 4, 2017, 2:09 PM EDT July 5, 2017, 3:27 AM EDT

Billions in state aid help Italy’s lenders muddle through
More than 300 billion euros in bad loans remain on books

Italy’s Gutgeld Says Bank Deals Will Restore Confidence

Italians may be about to experience something they haven’t felt in some time: confidence in their country’s financial system.

European Union officials capped years of turmoil in Italy’s banking industry on Tuesday by approving a plan to salvage Banca Monte dei Paschi di Siena SpA, a onetime pillar of the financial establishment brought to the edge of ruin by bad loans and poor management.

Coming on the heels of the liquidation of two lenders in northern Italy last month, the action defuses what’s been a big source of financial and political stress in the euro zone for the last two years. It also presents the bloc’s third-biggest economy with an opportunity to reboot a banking industry long plagued by shoddy underwriting and political interference that’s held back growth. The question now is, will government and business leaders seize the moment?

“These agreements mark a turning point for the whole Italian banking industry,” said Federico Ghizzoni, the former chief executive officer of UniCredit SpA, Italy’s biggest lender, and now the executive deputy chairman of Clessidra SGR, a Milan-based private equity firm. “The worst is over. Italian banks have managed to muddle through and hit the reset button.”

They’ve done so with considerable help from taxpayers, a practice that was supposed to be a thing of the past. The European Commission approved a state capital injection of 5.4 billion euros ($6.1 billion) in Monte Paschi, which has been in limbo ever since an emergency share sale flopped last December. Under a process called a “precautionary recapitalization,” the lender can be restructured to dump bad loans and shake up its business practices.

The same treatment wasn’t applied to Banca Popolare di Vicenza SpA and Veneto Banca SpA, two fixtures in Italy’s bustling northeast that burned through their capital as bad assets accumulated. On June 23, the European Central Bank deemed the pair insolvent and the Italian government provided as much as 17 billion euros to clean them up. Milan-based Intesa Sanpaolo SpA, which acquired the good assets of the two failed lenders for 1 euro, received more than 5 billion euros to prevent damage to its capital ratios.

Read here for more on Monte Paschi’s rescue

Both interventions appear to be inconsistent with the spirit if not the letter of post-crisis rules designed to avoid using public money to address bank failures in most circumstances. Yet even as officials debate the nuances of European bailout policy in Frankfurt and Brussels, there’s little doubt that wiping the slate clean is a boon for Italy, at least in the short term.
Systemic Risk

"The deals are questionable from a regulatory point of view, but from Italy’s point of view? They are very positive because at long last they remove systemic risk from Italian banking," said Jacopo Ceccatelli, CEO of Marzotto SIM SpA, a Milan-based broker-dealer.

Investors appear to agree. Shares in Intesa, Italy’s No. 2 bank with 739 billion euros in assets, have jumped almost 9 percent since June 23, compared to a 5.9 percent uptick in the Euro Stoxx Banks Index. UniCredit, which raised 13 billion euros in a February share sale, is also rallying as CEO Jean-Pierre Mustier exits businesses and sells off bad loans. In the first quarter, UniCredit doubled its earnings over the same period in 2016. And Banco BPM SpA, an institution formed in January by merging two struggling lenders, has returned 34 percent to stockholders as it executes a turnaround.

Monte Paschi on Wednesday laid out a five-year restructuring plan that includes cutting thousands of jobs and selling assets after the European Union said it could receive billions of euros in state aid. The lender will trim 5,500 positions, close 600 branches and dispose of 28.6 billion euros of bad loans by 2021, the Siena-based bank said Wednesday. The bank is also targeting a net profit of more than 1.2 billion euros by then.
Shaky Lender

The only shaky lender of any significant size that’s left is Genoa-based Banca Carige SpA, and with assets of 26.8 billion euros it doesn’t pose much of a risk to the wider banking system. Carige’s shares soared 23 percent Tuesday amid optimism that the strategy outlined by newly appointed CEO Paolo Fiorentino will address the bank’s capital issues.
The momentum may not last long if Italian banking and political leaders don’t tackle some fundamental weaknesses, said Marco Elser, the head portfolio manager at Lonsin Capital Ltd., a London-based distressed debt fund. Italian banks were still sitting on around 313 billion euros in doubtful loans at the end of 2016, which amounts to about 15 percent of total outstanding debt. That’s three times more than Spain, which used a 41 billion-euro bailout in 2012 to shore up its own weakest banks.
Your cheat sheet on life, in one weekly email.
Get our weekly Game Plan newsletter.

Steeped in cronyism, dozens of small and medium-sized lenders may still be too entwined with members of Italy’s parliament, unions, and philanthropic foundations to run their businesses in a transparent, prudent and efficient way. There’s little reason to believe the government, which is led by a caretaker prime minister, Paolo Gentiloni, will take on the mammoth task of reforming a business so central to the political economy, Elser said.

For more on the long decline of the world’s oldest bank

"The problems are not over," said the Rome-based money manager. "Italy is probably going to do what it’s always done and kick the bucket down the road."

While investors are warming up to Italian lenders, it’s telling that even the strongest of the lot, Intesa, received public money to take on Popolare di Vicenza and Veneto, said Federico Santi, an analyst with Eurasia Group. In contrast, Spain’s Banco Santander SA in June absorbed Banco Popular Espanol SA, including its 34 billion euros in bad assets, without state assistance.

"Italy plugged the hole but the underlying issues that have long plagued the system remain," Santi says. "There may be signs of improvement, but there’s still no big leap forward."

https://www.bloomberg.com/news/articles/2017-07-04/rescues-restore-confidence-in-italy-s-banks-yet-hurdles-remain



Recrimination all round over scandal engulfing world's oldest bank
It was founded in 1472, but the world’s oldest bank has been plunged into crisis by a scandal involving a very modern phenomenon – derivatives.
Banca Monte dei Paschi di Siena
The bank was Italy's third biggest and for centuries a symbol of Siena's wealth and prestige
Nick Squires

By Nick Squires, Rome

10:00PM GMT 27 Jan 2013
Follow

Italy’s Monte dei Paschi di Siena faces losses of up to €720m (£613m) over a series of derivatives deals, including a €220m loss for a three-year-old derivative contract with a Japanese bank, Nomura.

It is one of several derivatives trades that are now under internal investigation, amid reports that the bank hid the deals from regulators.

The scale of the losses has forced the bank – founded 20 years before Columbus discovered America – to step up its negotiations for a state bail-out worth €3.9bn, a request that has caused outrage among austerity-weary Italians.

Beppe Grillo, the leader of the maverick, anti-establishment Five Star Movement, which is contesting next month’s general election, said: "I don't see why we should give almost €4bn in public money to cover up a bunch of thieves."

The scandal, which has convulsed Italy in the past week, is a heavy blow for the country’s third biggest bank, which has been in trouble for years.
Related Articles

Monte dei Paschi shareholders approve capital increase 25 Jan 2013

World's oldest bank increases state aid request by €500m 28 Nov 2012

World's oldest bank Monte dei Paschi di Siena cut to 'junk' by Moody's 18 Oct 2012

Trouble at world's oldest bank leaves Siena paying the price 08 Sep 2012

But it goes way beyond the stone walls of Rocca Salimbeni, the magnificent palazzo in Siena that serves as the bank’s headquarters.

It has prompted frantic finger-pointing between current and former managers, political parties and the technocrat government of Mario Monti, the prime minister, who is seeking re-election at the head of a centrist bloc.

The biggest share of blame has been directed at the centre-Left Democratic Party, which has traditionally run Siena and exercised enormous influence over the bank.

The Democratic Party is expected to win the Feb 24-25 elections, but has been embarrassed by the scandal over the bank’s tattered finances, thrusting the affair into the heart of national politics.

For centuries Siena has been a virtual company town, locked in a symbiotic relationship with “Babbo Monte” or “Daddy Monte” as the bank is known by the Sienese.

It is the Tuscan city’s biggest employer and has a charitable foundation which has doled out millions of pounds to cultural associations, sports clubs and other worthy causes.

Between 1995 and 2010 the foundation distributed around €2bn to a variety of causes, from the restoration of historic buildings to the sponsoring of running races.

The largesse is now being drastically cut, with many of Siena’s 55,000 inhabitants fearing the end of an era in which Monte dei Paschi acted as a giant ATM with an apparently limitless cash flow.

The bank has announced that it is likely to cut its €8m sponsorship of Siena’s Serie A football club, as well as funding of the city’s successful basket ball team.

The biggest blow of all for the proud Sienese is the bank’s withdrawal of financial help for the Palio, the famous horse race held twice each summer in which bareback riders hurtle around the city’s main piazza.

Each year the bank’s charitable foundation gave a total of €225,000 to the rival ‘contrade’ or wards of Siena which back individual horses in the race and perpetuate a fierce rivalry that goes back centuries.

That grant is also being cut.

It is not a large sum, but the fact that the bank has pulled the plug on Siena’s most famous symbol is seen as hugely significant by locals.

“We’re in a state of psychological depression,” said Fabio Pacciani, who sits on a board that represents the city’s 17 ‘contrade’.

“It’s a devastating situation. The city is stunned, shocked and heart-broken. People are worried – in just a few years a solid bank has beenimpoverished.”

The drying up of charitable funds has also hit Siena’s university – one of the most prestigious in Italy – as well as its hospital and several libraries.

“The end of the largesse could have one positive aspect – people might finally begin to understand that an era is over, forever,” wrote the Heretic of Siena, an avidly followed anonymous blogger in the walled city.

The financial mess left in the wake of the derivatives scandal has invited parallels with one of the city’s most famous artistic treasures.

The walls of Siena’s magnificent Gothic town hall are decorated with frescoes by Ambrogio Lorenzetti, a 14th century painter, including the Allegory of Good Government and the Allegory of Bad Government.

The latter shows in vivid detail what happened in the past when Siena suffered misrule – the countryside laid waste, the townsfolk reduced to poverty and the city in ruins.

The crisis has already claimed its first scalp – the resignation of Giuseppe Mussari, a former bank chairman, from his post as chief of the Italian banking association, ABI.

He denies any wrongdoing.

The bank’s shares plunged in value at one point last week by more than 8pc.

Critics said the symbiosis between the 540-year-old bank and the city was far too close. In the last 25 years, every one of Siena’s mayors has been a former bank employee. Once their term in office was over, many returned to work for the lender.

“Many aspects of the scandal remain obscure,” said Tito Boeri, an economist at Bocconi University in Milan, in a front page editorial in La Repubblica newspaper.

“But one thing is certain. This affair was born of a system of power created by the intertwining of local politics and banking institutions.”

Monte Paschi’s problems date back to 2007, when it bought from Spain’s Santander a small Italian bank, Antonveneta, for €9bn – a sum thought by many in Italy to be way over the market value.
Banks and Finance


Nick Squires

By Nick Squires, Rome

10:00PM GMT 27 Jan 2013
Follow

Italy’s Monte dei Paschi di Siena faces losses of up to €720m (£613m) over a series of derivatives deals, including a €220m loss for a three-year-old derivative contract with a Japanese bank, Nomura.

It is one of several derivatives trades that are now under internal investigation, amid reports that the bank hid the deals from regulators.

The scale of the losses has forced the bank – founded 20 years before Columbus discovered America – to step up its negotiations for a state bail-out worth €3.9bn, a request that has caused outrage among austerity-weary Italians.

Beppe Grillo, the leader of the maverick, anti-establishment Five Star Movement, which is contesting next month’s general election, said: "I don't see why we should give almost €4bn in public money to cover up a bunch of thieves."

The scandal, which has convulsed Italy in the past week, is a heavy blow for the country’s third biggest bank, which has been in trouble for years.
Related Articles

Monte dei Paschi shareholders approve capital increase 25 Jan 2013

World's oldest bank increases state aid request by €500m 28 Nov 2012

World's oldest bank Monte dei Paschi di Siena cut to 'junk' by Moody's 18 Oct 2012

Trouble at world's oldest bank leaves Siena paying the price 08 Sep 2012

But it goes way beyond the stone walls of Rocca Salimbeni, the magnificent palazzo in Siena that serves as the bank’s headquarters.

It has prompted frantic finger-pointing between current and former managers, political parties and the technocrat government of Mario Monti, the prime minister, who is seeking re-election at the head of a centrist bloc.

The biggest share of blame has been directed at the centre-Left Democratic Party, which has traditionally run Siena and exercised enormous influence over the bank.

The Democratic Party is expected to win the Feb 24-25 elections, but has been embarrassed by the scandal over the bank’s tattered finances, thrusting the affair into the heart of national politics.

For centuries Siena has been a virtual company town, locked in a symbiotic relationship with “Babbo Monte” or “Daddy Monte” as the bank is known by the Sienese.

It is the Tuscan city’s biggest employer and has a charitable foundation which has doled out millions of pounds to cultural associations, sports clubs and other worthy causes.

Between 1995 and 2010 the foundation distributed around €2bn to a variety of causes, from the restoration of historic buildings to the sponsoring of running races.

The largesse is now being drastically cut, with many of Siena’s 55,000 inhabitants fearing the end of an era in which Monte dei Paschi acted as a giant ATM with an apparently limitless cash flow.

The bank has announced that it is likely to cut its €8m sponsorship of Siena’s Serie A football club, as well as funding of the city’s successful basket ball team.

The biggest blow of all for the proud Sienese is the bank’s withdrawal of financial help for the Palio, the famous horse race held twice each summer in which bareback riders hurtle around the city’s main piazza.

Each year the bank’s charitable foundation gave a total of €225,000 to the rival ‘contrade’ or wards of Siena which back individual horses in the race and perpetuate a fierce rivalry that goes back centuries.

That grant is also being cut.

It is not a large sum, but the fact that the bank has pulled the plug on Siena’s most famous symbol is seen as hugely significant by locals.

“We’re in a state of psychological depression,” said Fabio Pacciani, who sits on a board that represents the city’s 17 ‘contrade’.

“It’s a devastating situation. The city is stunned, shocked and heart-broken. People are worried – in just a few years a solid bank has beenimpoverished.”

The drying up of charitable funds has also hit Siena’s university – one of the most prestigious in Italy – as well as its hospital and several libraries.

“The end of the largesse could have one positive aspect – people might finally begin to understand that an era is over, forever,” wrote the Heretic of Siena, an avidly followed anonymous blogger in the walled city.

The financial mess left in the wake of the derivatives scandal has invited parallels with one of the city’s most famous artistic treasures.

The walls of Siena’s magnificent Gothic town hall are decorated with frescoes by Ambrogio Lorenzetti, a 14th century painter, including the Allegory of Good Government and the Allegory of Bad Government.

The latter shows in vivid detail what happened in the past when Siena suffered misrule – the countryside laid waste, the townsfolk reduced to poverty and the city in ruins.

The crisis has already claimed its first scalp – the resignation of Giuseppe Mussari, a former bank chairman, from his post as chief of the Italian banking association, ABI.

He denies any wrongdoing.

The bank’s shares plunged in value at one point last week by more than 8pc.

Critics said the symbiosis between the 540-year-old bank and the city was far too close. In the last 25 years, every one of Siena’s mayors has been a former bank employee. Once their term in office was over, many returned to work for the lender.

“Many aspects of the scandal remain obscure,” said Tito Boeri, an economist at Bocconi University in Milan, in a front page editorial in La Repubblica newspaper.

“But one thing is certain. This affair was born of a system of power created by the intertwining of local politics and banking institutions.”

Monte Paschi’s problems date back to 2007, when it bought from Spain’s Santander a small Italian bank, Antonveneta, for €9bn – a sum thought by many in Italy to be way over the market value.
Banks and Finance

Italy »
Finance »
Financial Crisis »
Nick Squires »

In Banks and Finance
We’re a powerful lot, us consumers, if we were only less busy or less lazy or less procrastinatory about flexing our economic muscles
Free bank accounts 'dead within a decade'
Karim Awad, centre, on stage at the Telegraph Middle East Congress last week
'Last frontier' for investors opens up in Saudi Arabia and Africa
Virgin Money Bank, High Street, Oxford, Oxfordshire, England, United Kingdom
New Virgin Essential Current Account - is it worth switching to?
Signs sit outside branches of a Lloyds TSB bank, part of the Lloyds Banking Group Plc, a Barclays Bank Plc bank, a NatWest bank, part of the Royal Bank of Scotland Group Plc (RBS), and a HSBC Holdings Plc bank in Staines, UK
The best banks for customer service in 2015
We’re a powerful lot, us consumers, if we were only less busy or less lazy or less procrastinatory about flexing our economic muscles
Which banks offer the best bribes to join?