MILAN, March 19 (Reuters) - Monte dei Paschi di Siena Chief Executive Luigi Lovaglio on Thursday sought to reassure investors that the strategy he outlined for the combined group with Mediobanca would
MPS CEO says plan for combined group with Mediobanca stands even with management changes
Strategic Direction and Leadership Changes at MPS and Mediobanca
By Valentina Za
Lovaglio Reassures Investors on Strategic Continuity
MILAN, March 19 (Reuters) - Monte dei Paschi di Siena CEO Luigi Lovaglio sought to reassure investors on Thursday that the strategy he has mapped out for the enlarged group with Mediobanca will stand regardless of who leads the bank.
Leadership Transition and Board Decisions
Lovaglio, who last year led the acquisition of Mediobanca, has been ruled out as a CEO candidate by MPS directors as the bank names a new board in April - shortly after he presented his strategy for the joint group.
Lovaglio's exclusion followed months of tensions with a key shareholder Francesco Gaetano Caltagirone over the strategy for Mediobanca, sources have previously said, though Caltagirone has denied any clash with Lovaglio.
Governance and Strategy Amidst Uncertainty
Answering a question about the governance turmoil at a Morgan Stanley investor conference in London, Lovaglio said the plan should be unaffected by the leadership uncertainty.
"A governance process is underway," said Lovaglio, who in 2023-2024 oversaw the re-privatisation of MPS after a 2017 state bailout.
"This plan is fully operational ... the remuneration for our shareholders is there ... and I think this is something that will be very, very, very difficult to change," he added.
Shareholder Returns and Capital Distribution
Capital Return Plans
MPS plans to return 16 billion euros in capital to shareholders by 2030, or 100% of profits.
MPS has a further 3 billion euros of capital which could also be distributed to shareholders, and Lovaglio said the next 12 months would be key to decide how to use it.
Potential for Additional Shareholder Rewards
"If no opportunities appear, it's clear that it makes a lot of sense to better reward our shareholders," he said.
Integration and Industry Context
Integration Timeline and Market Developments
MPS would work to integrate Mediobanca by the start of next year, monitoring developments in Italian banking, where bankers say the recent merger wave is yet to run its course.
On Wednesday, UniCredit CEO Andrea Orcel said the situation at MPS was "fluid" and he would see how things evolved when considering domestic M&A moves for UniCredit.
Board Approval and Merger Details
Before directors voted against him, Lovaglio secured board approval to buy 100% of Mediobanca - from the current 86% - and merge it into MPS - rebuffing shareholder and board pressure to leave Mediobanca as a separate listed company.
(Reporting by Valentina Za, editing by Gianluca Semeraro and Elaine Hardcastle)
