UniCredit Soon to Take Over World’s Oldest Bank in Italy
Banca MPS is Italy’s second-biggest bank that was founded in 1472 and by 2020, it has 1,418 domestic branches and 11 branches abroad
The world’s oldest bank Banca Monte Dei Paschi di Siena is either closing down in Italy as it faces massive layoffs as part of a planned corporate merger or there are high chances that Unicredit is going to seal the deal.
Banca is Italy’s second-biggest bank that was founded in 1472, it was transformed from a statutory corporation to a limited company, namely Banca Monte Dei Paschi di Siena (Banca MPS).
By 2020, it has 1,418 domestic branches and 11 branches abroad.
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Back in 2009, Monte Paschi was first bailed out and since then it has become a burden to the Italian state.
The lender is still struggling to restore profitability as financial assistance from two states and using more than 8 billion euros of public money all failed to stable the accounts.
Now, the government is seeking to exit the troubled lender by a year-end European Union (EU) deadline.
Thereby, in July, Milan’s Corporate investment banking company UniCredit exchanged talks with Italy’s treasury to buy “selected parts” of Banca MPS.
After performing poorly in a stress test, the result shows that the bank’s capital would be wiped out in a slump.
Although UniCredit and the Italian treasury are finding a way to keep a takeover from weighing on Paschi bonds, talks are still at a preliminary stage and they haven’t concluded anything yet.
Following the closure of the bank or sale to UniCredit, the decision will leave 6,000 people unemployed and damage Monte Paschi’s centuries-old link with the city.
