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MPS bank in no hurry to find a merging partner, MPS Foundation chairman Clarich says

by Marco Ferrando

“The priority for Monte dei Paschi di Siena is to continue to get stronger and return to profitability. Strategic options will be taken into consideration if they create value,” says Marcello Clarich, chairman of the MPS Foundation.

Clarich is in no rush. “The management has our full confidence and not only from us,” the manager told Italy24-Il Sole 24 Ore. The slate of candidates for the board presented at a shareholders meeting last week by the MPS Foundation together with fund managers Fintech and BTG Pactual was backed by 21% of capital, more than double the 9% the three shareholders hold in the Tuscan bank.

This result is the starting point and what matters the most, Clarich said. Perhaps this is even more important than the discussion about an possible “tie-up” that so much dominated part of the shareholders' meeting on Friday, where it was noted that no suitor is currently knocking at the door.

“The European Central Bank has called for consolidation, but there's no deadline, and there's no urgency technically because the bank's accounts are in order,” the banker said.
Moral of the story: there will be a merger only if MPS will gain from it and will not lose in terms of structure, assets, and specific weight.

The issue forces the foundation to face a dilemma ahead of the bank's imminent capital increase: subscribing pro quota and increasing its exposure, or opting for dilution, which could however double in case of a merger?

“We are starting to look into the issue together with our advisors,” Clarich said, indicating that a decision will not be taken before at least May 8, when the bank will present its quarterly results and its revised industrial plan.

The closer the bank will be to returning to profitability, the stronger the incentive will be for the foundation to take up its part of the capital increase. However, as Clarich said, profitability is only “the minimum condition necessary” to bet another €75 million on the bank without “breaching the principle of prudent management of assets.”

If the foundation is still uncertain about what to do, Fintech and BTG Pactual have not disclosed their next step either. Any idea?

“None in particular, although the appointment of BTG Pactual's Roberto Isolani as deputy chairman will be an important factor of continuity in the transition after outgoing chairman Alessandro Profumo,” Clarich said.

The first lock-up of the shareholder pact binding the foundation and the two funds signed a year ago will expire in mid-May. “We will all be freer,” said the chairman. The window of opportunity could be used to intervene in the agreements, and maybe expand them. The natural candidate is businessman Alessandro Falciai, who with a 1.7% stake in the bank had had four board members elected.

“I wanted to meet him, as appropriate in the case of partners who intend to represent a constant element in the share ownership of the bank,” he said.

On the busy agenda of the coming months, there is also the appointment of the successor of Profumo, who will step down. The next chairman will unlikely be chosen among the directors elected from the majority list.

The mandate is now in the hands of executive recruitment firm Korn Ferry. For Clarich, the ideal profile would be an “authoritative figure, also with experience in the banking sector.”