A bidding war is underway for the world's oldest bank
Summary
Two major Italian banks, Intesa Sanpaolo and Banco BPM, are competing to buy Banca Monte dei Paschi di Siena (MPS), the world's oldest bank. The outcome is important because MPS holds large government bonds and strategic financial assets in Italy.Key Facts
- MPS was founded in 1472 to provide credit to poorer citizens and is now a key bank in Italy’s financial system.
- Intesa Sanpaolo, Italy’s largest bank, offered 31 billion euros (about $36 billion) to buy MPS.
- Banco BPM, Italy’s third-largest bank, also proposed a "merger of equals" with MPS but did not disclose financial details.
- Banco BPM’s largest shareholder is French bank Crédit Agricole, owning about 20% of it.
- There are concerns that a BPM-MPS merger could give foreign (French) control over important Italian financial assets.
- MPS owns 13% of Generali Insurance, a big holder of Italian government bonds.
- Italy’s government, led by Prime Minister Giorgia Meloni, is cautious about foreign control over strategic companies and government debt.
- Political debates in Italy focus on preserving domestic control over banks and financial institutions like MPS and Generali.
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