Montepaschi CEO Lovaglio Outlines Restructuring and Merger Talks with Banco BPM

Montepaschi chief executive Luigi Lovaglio addressed the board on July 16, outlining the group's ongoing reorganisation. The plan creates Mediobanca Spa, a wholly‑owned subsidiary that will receive Montepaschi’s investment‑banking unit, high‑net‑worth private‑banking business, foreign branches and a 13.2% stake in Assicurazioni Generali. The restructuring also links Mediobanca’s advisory network with Widiba, transferring part of the newly assigned activities to that platform.

Advisors UBS and Bank of America are preparing financial models for a possible merger with Banco BPM and for evaluating Intesa Sanpaolo’s public‑exchange offer on Montepaschi. The board expects the corporate reorganisation to be finalised by the fourth quarter of the year. Internal tensions were reported, with minority directors objecting to the timing of board appointments and to a proposed bonus for Lovaglio. The CEO reiterated that a merger with Banco BPM would preserve greater independence for the Siena‑based bank, though it must compete with Intesa Sanpaolo’s higher‑priced bid and the capital‑size gap between the two institutions.