By Valentina Za
MILAN (Reuters) -Italy’s Monte dei Paschi di Siena on Friday posted third-quarter profit that topped estimates and raised its 2025 outlook, ahead of presenting a new strategy early next year following the acquisition of rival Mediobanca.
Monte dei Paschi (MPS), which the state rescued in 2017 and then successfully re-privatised keeping only a 4.9% stake, completed the Mediobanca takeover in September.
The acquisition of prestigious merchant bank Mediobanca by a bailed-out rival shocked Italy’s financial world and marked the biggest and boldest deal yet in an M&A wave sweeping the sector.
Rome had sought to combine MPS with Banco BPM, before rival UniCredit launched a failed bid for the lender.
MPS CEO Luigi Lovaglio said that although it was “strategically important” for the bank to strengthen its relations with BPM, it was currently fully focused on integrating Mediobanca.
Mediobanca will remain a separate legal entity with its own brand and money will be spent on packages to retain its investment and private bankers, Lovaglio said.
Net profit for the three months through September was 474 million euros ($553 million), up from 407 million euros a year earlier and well above a company gathered analyst consensus of 366 million euros.
The result was boosted by tax credits stemming from past losses. By merging with Mediobanca, MPS is set to unlock more tax credits, lifting profits which MPS plans to distribute in full to shareholders.
Shares rose 5% by 0938 GMT, outperforming a flat Italian bank index.
Lovaglio, a former UniCredit executive hired by Italy’s Treasury in 2022 to turn MPS around, told analysts pre-tax profit in the full year would “well exceed” 1.6 billion euros, raising a prior estimate he gave in August for pre-tax profit well above 1.5 billion euros.
MPS revenues held broadly steady year on year at around 1 billion euros, thanks to higher trading income and net fees, despite lower interest rates weighing on lending income. Analysts had expected revenues to decline to 973 million euros.
($1 = 0.8575 euros)
(Reporting by Valentina Za. Editing by Mark Potter and Sharon Singleton)
