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Monte dei Paschi CEO Luigi Lovaglio Receives New Mandate from Italy's Treasury

Italy's Treasury has announced its decision to retain Luigi Lovaglio as the CEO of Monte dei Paschi di Siena (MPS), keeping the experienced banker at the helm during a tumultuous time for the industry.

Luigi Lovaglio
Luigi Lovaglio

Treasury Nominates New Board of Directors for MPS

Monte dei Paschi is set to appoint a new board of directors on April 20, with the Treasury, which owns 64% of MPS after a 2017 bailout, submitting its list of nominees for the board on Saturday.

Nicola Maione Slated for Chairman Role at MPS

The Treasury also plans to appoint Nicola Maione, a lawyer, and MPS director since 2017, as chairman. Maione has previously chaired the board of state-controlled air traffic controller Enav.

Luigi Lovaglio's Impressive Banking Career

Lovaglio boasts a 40-year career in banking, having climbed the ranks at UniCredit and eventually leading the group's former Polish unit, Bank Pekao. He joined MPS just over a year ago, replacing the previous CEO.

Lovaglio's Successful Capital-Raising Efforts

Despite challenging market conditions, Lovaglio guided MPS through a crucial 2.5 billion euro ($2.7 billion) capital raising in November. A portion of these funds was used to facilitate staff exits agreed with unions, ultimately reducing operating costs.

Merger Plans to Solidify MPS' Turnaround

Lovaglio will now focus on finalizing a merger to secure MPS' revival and allow the state to fulfill European Union re-privatization commitments made during the bailout, according to an individual familiar with the situation.

Banking Supervisors Prefer Merger to Strengthen MPS

Banking supervisors continue to view a merger as the most effective way to bolster MPS' fragile profitability, as confirmed by a second source.

Italy Seeks More Time for MPS Stake Reduction

Following a failed attempt to sell MPS to UniCredit, Italy has requested additional time from the EU to reduce its stake in the bank. UniCredit is still considered a potential buyer, but the Treasury has also turned its attention to Banco BPM as a possible merger partner, as reported by Reuters sources.