Italian banks clear out top management

Banca Monte dei Paschi di Siena, one of Italy’s biggest and oldest banking groups, has appointed Fabrizio Viola, former chief executive of Banca Popolare dell’ Emilia-Romagna, as its new chief executive.

Viola takes over from Antonio Vigni, in what is a radical overhaul of the senior management of the bank and its major shareholder, the Fondazione Monte dei Paschi, which owns about half of the capital of the Tuscany-based bank.

At a press conference, the new chief executive limited himself to outlining the strategy for meeting the EBA’s demand that MPS increase its capital adequacy by €3.2bn. He said the plan centred on efficiency savings and the sell-off of non-core assets, but not by raising further capital from shareholders.

According to Il Sole 24 Ore, the Fondazione aims to sell off its shares in the state-controlled bank Cassa Depositi e Prestiti (2,57%); the F2i infrastructure fund (5,6%), private equity fund Sator Capital (1%), real estate firm Sansedoni (67%) and its last share in the investment bank Mediobanca (0,9%). The Fondazione will also have to reduce its 48,4% share in Banca MPS, though with the aim of not going below 33%.

At a recent meeting of shareholder unions, it was decided that the bank’s president Giuseppe Mussari should also leave, as part of a move designed to ring the changes in the bank’s management and to “shock the markets”. Mussari, who has already indicated he wants to return to being a lawyer, will stay until April to ensure a smooth handover.

The decision follows a difficult year for the bank, leaving shareholders highly critical of the bank’s management. One leading critic was blunt: “The bank and the Fondazione have to be repositioned to ensure a complete change of direction.”

Separately, it seems the shareholders of BPER, a co-operative bank based in Modena, are in a similar mood. Following the departure of Viola, the board of directors has announced that its chairman Guido Leoni has resigned “for strictly personal reasons and with immediate effect.” The board said it would appoint a new president at the next board meeting on January 18th.

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