By Valentina Za MILAN, Feb 27 (Reuters) - Italy's Monte dei Paschi di Siena set on Friday an annual profit goal of 3.7 billion euros ($4.4 billion) for 2030, pledging to complete its merger with rival
Monte dei Paschi targets €3.7bn 2030 profit after Mediobanca merger
Monte dei Paschi 2030 strategy and Mediobanca merger outlook
Profit target and ECB-requested multi-year plan
By Valentina Za
MILAN, Feb 27 (Reuters) - Italy's Monte dei Paschi di Siena set on Friday an annual profit goal of 3.7 billion euros ($4.4 billion) for 2030, pledging to complete its merger with rival bank Mediobanca this year and fully meet projected benefits in 2028.
Monte dei Paschi's (MPS) 16 billion-euro share-and-cash takeover of Mediobanca was the biggest deal in Italy's recent M&A wave, uniting a commercial bank with a branchless peer active in wealth management, consumer finance and investment banking.
The 2030 profit target, which excludes one-off items, compares with 2.4 billion euros in 2025, MPS said, as it presented a multi-year strategy for the joint group requested by the European Central Bank within six months of the transaction.
Merger mechanics and share swap timeline
CEO Luigi Lovaglio, who faces challenges as he seeks reappointment, said MPS would unveil details on March 10 of the share swap to acquire the 14% of Mediobanca it doesn't already own.
By taking Mediobanca private 60 years after the Milanese merchant bank that presided over Italy's post-war boom went public, MPS will pocket 700 million euros in benefits in the second half of 2028, Lovaglio said.
Integration costs will total 600 million euros, including 100 million to boost bankers' paychecks and avoid departures, and be booked mostly in 2026.
Ownership, capital position, and shareholder returns
Bailed out by the state in 2017, MPS was re-privatised in 2023-2024.
The proposed 16 billion euros in payouts by 2030, or 100% of profits, are a boon for shareholders that acquired the around 60% stake Italy has placed on the market.
After bringing in dozens of foreign investment funds as shareholders, Rome eventually created a core of Italian investors who now hold roughly a third of MPS, with the state retaining almost 5%.
Dividends, buybacks, and EPS considerations
Finance Chief Andrea Maffezzoni said MPS would combine dividends with a share buyback for 2026, so as to offset the impact of paying for the residual Mediobanca stake in stock and lowering earnings per share.
Business structure and Generali stake contribution
MPS plans to structure the new group's diverse business into five areas, and reap 8-9% of its operating income from Mediobanca's 13% stake in top Italian insurer Generali, currently worth 7 billion euros.
Excess capital and potential uses
MPS said it had ample excess capital, meaning the high payout would still leave it with some 3 billion euros in cash in 2030 in excess of a targeted 13% minimum core capital threshold, which it could use for additional deals or to reward investors.
"It's just a matter of timing, opportunity and to see what is happening on the market," Lovaglio said about the use of the money.
($1 = 0.8470 euros)
(Reporting by Valentina Za, editing by Giulia Segreti, Thomas Derpinghaus and Susan Fenton)
