March 24 (Reuters) - Italian lender Banca Monte dei Paschi di Siena said on Tuesday its board identified Fabrizio Palermo as the sole candidate for the position of chief executive officer. (Reporting
Italy's MPS board picks Palermo as sole CEO candidate to face off with Lovaglio
Main Developments in the MPS CEO Selection
By Valentina Za
Palermo Chosen as CEO Candidate
MILAN, March 24 (Reuters) - Banca Monte dei Paschi di Siena said its board had chosen Fabrizio Palermo as its candidate for chief executive, pitting the head of Rome‑based utility ACEA against current CEO Luigi Lovaglio in a race to lead Italy's third‑largest bank.
MPS said Palermo, a former head of state investment agency CDP, was chosen as the best of three candidates to guide the state‑backed lender through its current phase, marked by shareholder tensions and heightened scrutiny of its leadership.
Shareholder Vote and Board Decision
The board's choice will be put to a vote on April 15 when shareholders will be called to decide between Palermo and Lovaglio, who has led MPS since 2022, as the name a new board.
Key Investors and Board Members
ACEA <ACE.MI> and MPS have in common a leading investor, Italian businessman Francesco Gaetano Caltagirone, whose son Alessandro sits on both the ACEA and MPS boards.
"The board ... considered that Palermo's profile is the most suitable, in the current context, to support the bank in its ongoing phase of industrial transformation and strategic evolution," MPS said in a statement late on Tuesday.
Board Deliberations and Other Candidates
The decision came after a two-day meeting which will resume on Wednesday with a discussion centered around the position of CEO Lovaglio.
The board had initially selected another two potential candidates: veteran banker Corrado Passera, and former bank executive Carlo Vivaldi.
Background: MPS Restructuring and Strategy
MPS was bailed out by the state in 2017 after a decade on the brink of collapse. It restructured under CEO Lovaglio and last year joined a consolidation wave in Italian banking, buying bigger rival Mediobanca.
Following a boardroom and shareholder spat over the best strategy for Mediobanca, the MPS board ruled out Lovaglio for another term at the helm when it picked its short list of candidates this month - which contained three CEO candidates.
It said Palermo had emerged as the strongest candidate after an in-depth assessment.
Lovaglio's Response and Boardroom Tensions
On Saturday, Lovaglio launched a bid to retain his job and was put forward as CEO by small MPS investor PLT Holding.
The board of MPS discussed on Monday and Tuesday taking away Lovaglio's executive powers, sources with knowledge of the matter told Reuters.
Potential Interim Leadership
On Wednesday the board could approve a decision to strip the CEO of powers and hand over the running of the bank to longstanding Deputy General Manager Maurizio Bai, people previously said.
(Additional reporting by Mrinmay Dey in Mexico City; Editing by Howard Goller and Gavin Jones)
