How Italian banks built new foundations
Politics in and out of the boardroom
Founded in 1472 in the picturesque Tuscan city of Siena, Banca Monte dei Paschi di Siena, is the world’s oldest bank.
The bank, like the town and region with which it is synonymous, has an illustrious history of independence. But just as Siena’s influence was eventually eclipsed by neighbouring rival Florence in the 14th century, Monte dei Paschi, Italy’s fourth-largest bank, today faces the threat of being eclipsed by rivals pursuing an aggressive strategy of mergers and acquisitions.
As the city’s largest employer and a major patron of the arts, Monte dei Paschi has deep links with the community. That link is deepened by the Foundation of Siena, a non-profit body made up of political appointees, which is the bank’s largest shareholder. Although this relationship is a source of strength, protecting the bank from the possibility of any hostile takeover, some analysts believe it is also a potential stumbling block to any M&A options that might dilute the foundation’s control.
The bank has the highest cost-income ratio among the major players in Italy but has been working to improve efficiency and growth with some success.