Monte dei Paschi's Bold Move: A New Era in Italian Banking

Monte dei Paschi di Siena announced it will complete a merger with Mediobanca by the end of this year, targeting a profit of 3.7 billion euros by 2030. The strategic move follows MPS's recent re-privatization and aims to reshape the Italian banking sector.

MPS, which was bailed out in 2017 and re-privatized over 2023-2024, acquired 86% of Mediobanca in a consolidation wave in the Italian banking industry. The bank is now poised to acquire the remaining 14%, bringing Mediobanca private, and aims to achieve 700 million euros in savings from the merger.

Projecting full profit distribution in the coming years, MPS plans to pay 16 billion euros in dividends by 2030. The strategy capitalizes on recent higher interest rates, ensuring substantial profit payouts while retaining a cash reserve for potential deals. This 16 billion-euro acquisition marks a significant transformation in Italy's M&A landscape, combining a traditional commercial bank with a specialized financial institution.