Are You in Favor of the Privatization of Banca MPS? Join the Survey

Privatization of Banca MPS: A Hot Topic

Money.it is conducting a survey to gather opinions on the privatization of Banca MPS.
Following the recent announcement by the Ministry of Economy regarding the intended sale of another 10% of the historic Sienese bank at the beginning of July, opinions are divided on this strategic move after a previous 12.5% stake sell-off in April.

The Troubled History of Monte dei Paschi di Siena

Monte dei Paschi di Siena holds the title of the oldest active bank in the world, yet its recent years have been tumultuous due to financial challenges stemming from the ill-fated 2008 acquisition of Banca Antonveneta for 10 billion euros.

In efforts to rescue MPS and other struggling banks, the government allocated a 20 billion euro fund in 2017.
Out of this amount, 5.4 billion euros were used to acquire a 68% stake in the Sienese institution, making the State its primary shareholder.

The Selling Spree and Financial Implications

There have been talks of divesting MPS shares held by the Treasury, with notable sell-offs in recent years.
In November 2023, the Ministry of Economy and Finance sold 25% of the shares, reducing its stake to 39.2%.
The subsequent 12.5% sale in April further decreased the government’s holding, with a new significant 10% sale expected in July.

The purpose of this survey is to gauge public sentiment towards the privatization of Banca MPS, a move that has gained momentum under the current government, aiming to privatize shares of various state-owned entities including MPS, Poste Italiane, and potentially Ferrovie dello Stato.

Financial Prospects and Strategic Considerations

If the planned 10% stake sale of Monte dei Paschi di Siena goes ahead in July, it is estimated to generate a minimum income of 500 million euros, supporting the government’s drive to raise funds while retaining control of key strategic assets.

Public finances have seen substantial boosts from previous sales, with 920 million euros collected in November, and an additional 650 million euros in the spring.
These financial injections come at a crucial time as the government faces pressure regarding excessive deficit procedures.

Despite the potential benefits of future dividends to the State from holding onto MPS shares, some argue that selling additional stakes now, amidst a booming banking sector, could be premature.
Nevertheless, the government’s eagerness to bolster its finances raises questions about the timing and implications of the proposed 10% share sale.