Italy Bank Mergers & Acquisitions (Banco BPM)

In the 1970s, Italy suffered from a severe shortage of small-denomination coinage, and commercial banks issued their own small-denomination banknotes known as miniassegno (or miniassegni in plural) like this 50 Italian lira miniassegno issued by the Banca Popolare di Milano (today's Banco BPM). Though not legal tender, the miniassegni were widely circulated and used to represent small change at the time.

Banco BPM (2016 to present)

Banco BPM was formed in October 2016 by the merger of two joint-stock co-operative banks with very similar names: Banca Popolare di Milano (Banca BPM) and Banco Popolare.  Note that the bank was known as Banca BPM before the merger with Banco Popolare, but Banco BPM after the 2016 merger. Banco BPM can trace its origins to many regional banks, whose histories can be best explained by the three banking groups that they evolved into during the first decade of the 21^st century.

The old Banca Popolare di Milano (Banca BPM)

Inspired by the co-operative moment that was prevalent in 19^th century Europe, a young economist named Luigi Luzzatti in 1865 founded the Banca Popolare di Milano. (Mr. Luzzatti would later become Italy’s Prime Minister in 1910.) Banking in the 19^th century in most of the world was typically a local business, as nationwide branch networks did not exist until the 20^th century is most cases. For Banca Popolare di Milano, its first two branches outside of its head office building opened in 1881, but only to be shut two years later, which for banks in the era was not uncommon. Before the days of computers and the internet, capital, money and information could not be easily and instantly transferred or accessed between offices. For a bank to open a branch office was almost no different from launching a brand new bank, for the branch would require its own capital and its own deposit base.  In other words, opening new branches was simply a risky and costly affair for any bank.

It wasn’t until 1911, some 30 years after its first attempt, that BPM opened a branch office in Milan once again. This time, the venture was very successful, as clients flocked to the new office and a strong deposit base was built soon. The start of World War I in 1914 initially brought panic to Italy, and a run on deposits at BPM. But being the industrial heartland of the country, soon Milan and the rest of Northern Italy prospered from the war’s soaring demand for industrial goods. Unfortunately, when peace returned in 1918, inflation remained stubbornly high, and the massive debts incurred during the war became unsustainable. The economic chaos led to a sharp depreciation of the Italian lira, and social unrest intensified during the 1920s.

The Great Depression of 1929, which originated in the United States, further aggravated Italy’s already decade-long stagflation. This economic and social crisis culminated in the 1933 collapse of the Italian banking system. The three largest banks in the country were nationalized while many smaller ones either went bankrupt, or were ordered by the Italian government to join the somewhat more healthy banks.

In due course, BPM did survive both the Great Depression and World War II. By the time peace returned in 1945, BPM had 5 branches as well as 33 agencies.

In the 1950s, BPM sought to expand beyond its Lombardy border. However, Italy’s bureaucratic and protectionist political system banned regional banks based in one province from entering another province directly. They were, however, allowed to acquire regional banks outside of their domicile in some cases, particularly if the target banks were financially unstable. In 1957, BPM made its first corporate acquisition by taking over the Banca Popolare di Roma (founded in 1924), allowing the Milan-based bank to expand into Rome and forge direct links between Italy’s two largest cities.

During the 1960s and 1970s, BPM benefited from Milan’s and Lombardy’s robust industrial economy. As such, BPM opened many new branches to capture the growing economic prospect. However, BPM also faced fierce competition from other co-operative and savings banks, as well as the much bigger national banks that specialized in corporate and merchant banking. Over time, regional banks formed strategic alliances with each other to achieve better synergy, to spread their credit risk, and to offer greater geographical reach for their respective clients. During this period, BPM acquired a minority stake in an agricultural bank called Banca Agricola Milanese and well as a 60% stake in a fellow co-operative bank called Banca Briantea.

While BPM was keen as a consolidator of other banks, Banca d’Italia, the Central Bank, blocked numerous merger attempts proposed by BPM and other co-operative, savings and even national banks. The long-held political and corporate culture of small-scale, local and autonomous businesses was not to be ruffled. In 1979, however, when Banca Popolare Cooperativa Vogherese became illiquid, BPM was permitted to rescue and take over the ailing bank.

BPM for the first time opened offices outside of Italy (in London, New York and Frankfurt) during the 1980s to provide support to the bank, and to raise its profile internationally. Towards the end of the decade, the European Union began to constitute a “single-market” framework, with the aim to open up borders to allow free movement of goods, services, capital and people between all member states, to be effective in 1993. This policy would throw the Italian banking market wide open to competition from other EU banks. To prepare the backward and fragmented domestic banking market for the new competition, Italy proposed a plan that centred on four goals: de-nationalization (relinquishment of state management), consolidation, modernization and strengthening. The former anti-consolidation policy was relaxed and in due course, BPM took over the Banca Popolare di Bologna e Ferrara in 1988, and the Banca Popolare di Apricena in 1989.

Throughout the 1990s, BPM entered the equipment finance (leasing) and life insurance business by forming joint-ventures with merchant and investment bank Mediobanca and insurer RAS. And in 1994, BPM became the first co-operative bank in Italy to be listed on the main stock market. Previously, its stock had been listed on the restricted market. As such, Italy’s co-operative banking sector began a hybrid mutual-joint-stock arrangement, where its ownership structure displays traits of typical co-operative format (mutually-owned by members) but yet with shares that can be bought and sold via the stock market (joint-stock shareholding).

Beginning in 1997, BPM made an intense series of acquisitions, first of the two banks that it had held a stake for decades, namely Banca Agricola Milanese and Banca Briantea, then a significant stake in Banca Akros (1998), Banca 2000 (1999, formerly Ina Banca), Banca di Legnano (2001), savings bank Cassa di Risparmio di Alessandria (2004) and Banca Popolare di Mantova (2008).

Banca Popolare Italiana (BPI)

The holding company Banca Popolare Italiana was the new name chosen by Banca Popolare di Lodi in 2005. But it only existed till 2007, when it was taken over by the Banco Popolare di Verona e Novara for EUR 8.2-billion to become the Banco Popolare group. The year 2005 for BPI was, however, more remembered for its “bancopoli” scandal. At the time, Dutch bank ABN AMRO made a bid to acquire Italian bank Banca Antonveneta. BPI, which already owned a small stake in Banca Antonveneta, also wanted to acquire the bank but lacked the means to compete with ABN AMRO’s financial prowess. BPI then secretly acquired significant stakes in Banca Antonveneta using illegally-obtained funds, in some cases, even customer deposits at BPI. The inside stock trading, embezzlement and stock manipulation scandal was apparently known to and covered up by the Italian Central Bank, as Banca d’Italia Governor Antonio Fazio had close personal ties with BPI’s Managing Director Gianpiero Fiorani. After the scandal exploded, Antonio Fazio resigned from the Central Bank and BPI’s Gianpiero Fiorani was arrested and charged. In the end, BPI’s illegally purchased shares in Banca Antonveneta were confiscated and turned over to the only legitimate offer: ABN AMRO.

The major predecessor banks that became BPI are briefly explained below.

Banca Popolare di Lodi (1864 to 2007)

The core predecessor of Banca Popolare Italiana (BPI) was the Banca Popolare di Lodi, which was founded in 1864.  Lodi is a province in the Italian region of Lombardy. Like many co-operative banks, it offered banking services but also supported local infrastructure and economic development. By the late 1980s, the bank had expanded outside of Lombardy into Emilia Romagna, Lazio and Piedmont with 110 branches.

At the turn of the 21^st century, Banca Popolare di Lodi made a wave of acquisitions including three savings banks Casse di Risparmio di Lucca, Pisa e Livorno* in 1999 (banks followed by an asterisk * have separate descriptions below), investment bank Efibanca - Ente Finanziamenti Industriali (2000), ICCRI – Istituto di Credito delle Casse di Risparmio Italiane (2000), Cassa di Risparmio di Imola* (2000), Banca Popolare di Crema* (2001), Banca Popolare del Trentino* (2003), Banco di Chiavari e della Riviera Ligure* (2003) and Banca Popolare di Cremona* (2003). In 2005, a parent company known as Banca Popolare Italiana (BPI) was formed to hold the various banks acquired by Banca Popolare di Lodi over the past decade.

Cassa di Risparmio di Lucca Pisa Livorno (1834/35/36 to 1999)

This savings bank traces its history to three different institutions: Cassa di Risparmio di Pisa (founded 1834), Cassa di Risparmio di Lucca (founded 1835) and Cassa di Risparmio di Livorno (founded 1836). Like other casse di risparmio, C.R. di Pisa, C.R. di Lucca and C.R. di Livorno in the early 1990s were converted to joint-stock banks and separated from the charitable foundations that held them. In 1995, these three savings banks amalgamated under a parent company called Holding Casse del Tirreno. In 1999, Casse del Tirreno joined the Banca Popolare di Lodi.

Cassa di Risparmio di Imola (1855 to 2000)

Like other savings banks in Italy, Cassa di Risparmio di Imola had a dual mandate to offer banking services as well as do charitable work to support the local economy and society. It was founded in 1855 and was taken over by Banca Popolare di Lodi in 2000.

Banca Popolare di Crema (1870 to 2001)

Banca Popolare Agricola di Mutuo Credito was created in 1870 in the agricultural town of Crema. The bank was later renamed Banca Popolare di Crema. It became part of the Banca Popolare di Lodi in 2001.

Banca Popolare del Trentino (1984 to 2003)

Banca Popolare del Trentino was the youngest constituent bank to become the Banco BPM. It was only established in 1984 and in 2003, it became part of the Banca Popolare di Lodi.

Banco di Chiavari e della Riviera Ligure (1870 to 2003)

In 1870, a number of businessmen founded the Banco di Sconto del Circondario di Chiavari. The bank adopted its current name in 1921. In 1968, it was acquired by the much larger Banca Commericale Italiana (BCI). In 2001, BCI merged with Banca Intesa (which become today’s Intesa Sanpaolo). Banca Intesa divested Banco di Chiavari e della Riviera Ligure to Banca Popolare di Lodi in 2003.

Banca Popolare di Cremona (1865 to 2003)

The bank began life as the Società Popolare di Mutuo Credito in Cremona in 1865. Cremona is an agriculturally-rich region in Lombardy. In 2003, Banca Popolare di Cremona became part of the Banca Popolare di Lodi.

Banco Popolare di Verona e Novara (1867 to 2007)

Banca Mutua Popolare di Verona was founded in 1867 in Italy’s booming northern industrial heartland. It opened its first branch office in 1927, and expanded outside of Verona in 1933. During the 1930s economic depression, it took over rival Banca Cattolica Veronese.

As a co-operative bank, Banca Popolare di Verona in the post-WWII era financed the re-building effort as well as new infrastructure such as railways, highways and canals. As explained earlier, Italy’s banking system in the late 1980s and the entire 1990s experienced a wave of consolidations, as the country prepared for the open-border market under the EU framework. Banca Popolare di Verona first acquired the Banca Popolare di Castiglione delle Stiviere in 1988. Between 1993 and 1995 the bank merged with the Banco S. Geminiano e S. Prospero* (banks followed by an asterisk * have separate descriptions below) to become Banca Popolare di Verona – Banco S. Geminiano e S. Prospero. Then in 1997, it took over the Credito Bergamasco*. It acquired Banca Aletti* in 2000 and in 2002, merged with the Banca Popolare di Novara*. Following this last amalgamation, the name of the bank was updated to Banco Popolare di Verona e Novara. In 2007, it took over Banca Popolare Italiana (BPI) for EUR 8.2-billion to become the Banco Popolare group.

Banco S. Geminiano e S. Prospero (1897/99 to 1995)

Emilia-Romagna is a region in Northern Italy well known for its capital city of Bologna. At the close of the 19th century, two banks that became part of the Banco BPM were established, namely the Banco S. Geminiano in the city of Modena in 1897, and the Banco S. Prospero in the city of Reggio Emilia in 1899. In 1932, these two banks consolidated into the Banco S. Geminiano e S. Prospero to gain efficiency and expand their reach.  Between 1993 and 1995, Banca Popolare di Verona and Banco S. Geminiano e S. Prospero merged to become known as – a very long and cumbersome name – Banca Popolare di Verona – Banco S. Geminiano e S. Prospero (BPV BSGSP).

Banco San Marco (1895 to 1995)

Many visitors to Venice would have come across a Banco San Marco branch in the city’s famous Piazza San Marco. The Venetian bank was founded in 1895. In 1995, the bank was taken over by Credito Bergamasco, which itself was combined into Banca Popolare di Verona – Banco S. Geminiano e S. Prospero in 1997.

Credito Bergamasco (1891 to 1997)

Credito Bergamasco was founded in Bergamo in 1891 as Banca Piccolo Credito Bergamasco. The bank had a history of supporting local art, culture, healthcare and science. In 1989, French bank Crédit Lyonnais acquired a 56% stake in Credito Bergamasco, but sold it to the Banca Popolare di Verona – Banco S. Geminiano e S. Prospero group in 1997, which in 2002 became the Banco Popolare di Verona e Novara.

Banca Aletti (1826 to 2000)

Banca Aletti began in 1826 as a bureau de change (foreign exchange dealer) in Milan. It over the decades became a stockbroker and private bank. In the 20^th century, members of the Aletti family were prominent executives of the Milan stock exchange. In 1992, Banca Popolare di Verona became a shareholder of Aletti & C. Sim. In 1998, it gained the approval to offer banking service, becoming Banca Aletti & C. In 2000, Banca Popolare di Verona took full control of Banca Aletti, which now forms the private banking and investment banking division of the group.

Banca Popolare di Novara (1871 to 2002)

Banca Popolare di Novara was created in 1871 in northwestern Italy. It grew to become one of the largest co-operative banks in Piedmont region and by the 1920s, had expanded into Milan, Genoa and even Rome in central Italy. By 1971, its network numbered 300 branches. Overseas offices were set up in England, France, Switzerland and Luxembourg by the last quarter of the 20^th century. In 2002, Banca Popolare di Novara merged with the Banca Popolare di Verona – Banco S. Geminiano e S. Prospero group. The new bank dropped the “Banco S. Geminiano e S. Prospero” part of the name and instead became known as Banco Popolare di Verona e Novara.

Recent transactions:

• In 2007, Banco Popolare di Verona e Novara took over Banca Popolare Italiana (BPI) for EUR 8.2-billion (USD $10.26-billion) and adopted a new name: Gruppo Banco Popolare. In the Italian press, the new bank was sometimes known simply as “Banco”.
• In 2016, Banca Popolare di Milano and Banco Popolare merged to become the new Banco BPM, the new Banco BPM ranked No. 3 in Italy in some measures.
• In November 2024, UniCredit offered to buy Banco BPM for EUR 10.1-billion (USD $10.6-billion). In terms of assets, UniCredit was four times as large as Banco BPM. However, as of mid-2025, it was believed that UniCredit's chance of successfully taking over Banco BPM was low.
• To starve off UniCredit's hostile bid for Banco BPM, Banco BPM made a EUR 1.6-billion offer to buy the 80% of asset manager Anima Holding that it didn't already own. In April 2025, after raising its offer to EUR 1.8-billion (USD $1.89-billion), Banco BPM successfully raised its stake in Anima Holding from 20% to 90%, valuing the whole of Anima at EUR 2.3-billion (USD $2.52-billion).

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Italy Bank Mergers & Acquisitions (Banca Monte dei Paschi di Siena)

Photo: a Banca Monte dei Paschi di Siena branch in the city of Cosenza, Italy.

I wish to express my special thanks to my friend Rob van Kan for taking this photo and allowing me to use it. You may see more of Rob's photos via this flickr link:

https://www.flickr.com/photos/8980780@N07/

Rob also maintains a blog on world affairs (in Dutch):
https://edgeofeurope.wordpress.com/


Banca Monte dei Paschi di Siena

Today, we generally think of banking for the following reasons: making a deposit of “money” into an account for safekeeping; obtaining a loan in its many forms; and relying on various banking products (such as a cheque, credit card, bank card, money order, electronic fund transfer, or even Apple Pay or PayPal) to make payments to facilitate transactions. While many of these banking functions only became common and universal from the late 19^th century (some if not only the 2010s!), the origins of modern banks date back to Italy in the 15^th century, which after the Dark Ages and the “Black Death” plague of the late 1340s, saw a re-birth of cultural, literary, science, economic and social advancement, hence the term “Renaissance era”.

Commerce between city states and dukedoms in Europe was on a major upswing during this time, and the need for money exchange and payments for trade transactions led to some innovative merchants setting up temporary money-dealing benches at trade fairs to offer an early form of trade finance. It was the word “banco”, Italian for “bench,” that evolved into words such as bank (English, Dutch, German and Danish etc.), banque (French) and pankki (Finnish). However, such early banks did not have permanent offices, and really only catered to travelling merchants at trade fairs. Meanwhile, the elites of society: the Pope, the archbishops, the princes, the dukes, the aristocrats and high government officials had close ties with the goldsmiths, who acted as private bankers at the time.

At the other end of society, which was the vast majority of the people, be they blacksmiths, farmers, labourers, artisans, servants or housewives, possessed far too little spare cash to attract the attention of the private bankers. Thus, most of the masses had no access to any bank and no ability to obtain a loan. This, however, began to change in the mid-1400s, when the Catholic Church and some political leaders took pity of the underclass’s grim livelihood by establishing charitable pawnshops or charitable loan agencies known as “monti di pietá” (or monte di pietá when singular, literally meaning "mount of compassion").  These monti di pietá offered low-interest-rate loans for collateral such as clothing, family heirlooms or tools.

While many of Renaissance Italy’s monti di pietá were founded by the Catholic Church, some were established by political leaders, which was the case for the Republic of Siena’s Monte Pio when the city state’s Magistrate Council along with local aristocrats provided 5,000 florins in 1472 to back the charitable loan agency.

The Renaissance period, despite its romantic sentiments in modern beliefs, was nevertheless a turbulent era.  Between 1551 and 1559, Henry II of France fought a war against Holy Roman Emperor Charles V (ruler of the Spanish Empire) and his ally Duke Cosimo I de’ Medici of Florence, for domination of Europe and the Mediterranean Sea. For decades, the Republic of Florence and Republic of Siena had been bitter political and economic rivals. In 1555, Siena fell and was annexed by Florence, but Monte Pio was allowed to continue operation. In 1580, it gained even more prominence when it assumed the role as the collection agency for the Ufficio dell’Abbondanza (“Office of the Food Surplus”) in Siena.

By the 1620s, demand for farming-related loans in Siena expanded at such pace that Monte Pio needed more capital. In 1624, Ferdinando II de’ Medici agreed to establish an agricultural loan agency based on the model of Monte Pio. However, the shrewd Grand Duke of Tuscany did not want to be personally liable to potential losses (and even bankruptcy, should it ever happen) of new agricultural loan agency.  To indemnify himself (remove his liability risk), Ferdinando II took the unusual and genius step of entailing the revenue from the state-owned pasture land to the loan agency. In essence, this reform gave the new loan agency a steady source of income, and its depositors a de facto state guarantee backed by the revenue of the pasture land. Yet it also transferred the risk of the business to the collective agricultural economy of Tuscany.  To emphasize this pasture revenue feature and modus operandi, the new loan agency was aptly named Monte dei Paschi di Siena (MPS), with the Italian word “paschi” meaning “pasture”.

Monte Pio and Monte dei Paschi both continued operations during the 18^th century, amidst the political instability following the end of the House of Medici in 1737.  In 1784, the two Monti were amalgamated into a single entity but continued to maintain the dual mandates of charity and banking. One prime example was the financial contribution it made to help re-build Siena after a disastrous earthquake in 1798.

In 1833, Monte dei Paschi underwent a major re-organization, including the establishment of a separate savings bank (known as a “cassa di risparmio”). In 1872, a new charter once again confirmed Monte dei Paschi to be an institution belonging to the city of Siena.  The 1872 charter also stipulated that up to half of the bank’s profits be distributed to fund charitable or public utility works. Meanwhile, the Grand Duchy of Tuscany itself had ended back in 1859, and by 1861, it had become part of the newly-created Kingdom of Italy.

Despite its centuries-long existence, Monte dei Paschi di Siena’s operations only expanded beyond the provinces of Siena and Grosseto in the early 1900s. It nevertheless ranked second amongst all savings banks in the country by 1910.  In 1929, MPS brokered the merger of Credito Toscano and the Banca di Firenze (Bank of Florence) and acquired a stake in the resulting entity Banca Toscana. The global Depression in the 1930s hit Italy hard, but MPS struggled along relatively better than many rivals.

Italy after the end of World War II was known for its slow economic growth, strict bureaucratic regulation, high unemployment and inflation, and weak currency (the Italian lira). Nevertheless, MPS expanded further into different regions of Italy and opened representative offices in major financial centres of the world: New York, London, Singapore and Frankfurt.

In 1990, MPS acquired controlling stakes in a medium-term merchant bank called the Mediocredito Toscano as well as an agricultural lender called dell’INCA (Istituto Nazionale per il Credito Agrario).  In 1992, MPS acquired control of another Tuscany savings bank: Cariprato -- Cassa di Risparmio di Prato. It also launched an insurance joint-venture named Monte Paschi Vita with French mutual bancassurance giant Crédit Agricole. Also in 1992, MPS bought private bank Banque Atlantis in Geneva. Then in 1994, mutual funds were offered for the first time by the newly-created Ducato Gestioni unit.

Meanwhile, back in the late 1980s, the European Union began to constitute a “single-market” framework, which sought to guarantee free movement of goods, services, capital and people between all member states, to be effective in 1993. This opening of goods and services market would throw the Italian banking market wide open to competition from other EU banks. To prepare the backward and fragmented domestic banking market for the new competition, Italy proposed a remedy that centred on four goals: de-nationalization (relinquishment of state management), consolidation, modernization and strengthening. The first major reform involved the Italian government passing the Amato legislation in 1988, which required the state-administered savings banks to be converted into private-sector, for-profit joint-stock banks. In 1995, the Monte dei Paschi was formally separated into the Banca Monte dei Paschi di Siena (BMPS) SpA (SpA is the Italian term for “limited-liability company”) and the charitable organization Fondazione Monte dei Paschi di Siena. Initially, this separation was only a legal technicality, as the charitable foundation still fully owned and controlled the bank.  A second stage of the banking reform was the passage of the Ciampi legislation in 1998, which stipulated that the charitable foundations must gradually spin off their holdings of the savings banks, thus ending the centuries-old tradition of state-control and non-profit nature of the Italian savings banks.

In 1999, Banca Monte dei Paschi di Siena was partially floated on the Milan stock exchange. The stock listing not only gave BMPS access to capital from the international financial market, but much greater freedom to acquire or be acquired by other banks.

Recent transactions:

• In 1998, MPS bought 70% of Banca Agricola Montavana, which had 290 branches in northern Italy.
• In 2000, MPS bought a 94% stake in Banca del Salento and renamed it Banca 121. It took full ownership in 2005.

• In 2001, MPS acquired a 4.75% stake in Banca Nazionale del Lavoro (BNL) and the two banks entered into merger talks but failed to settle on the terms.

• In 2002, MPS took full control of Florence-based Banca Toscana, a bank with over 400 branches and one which MPS had had a stake in since 1929.

• The wave of imprudent acquisitions in the 1990s, however, proved costly to MPS as bad loans soared. In 2003, MPS sold its 79% stake in Cariprato (acquired in 1992) to Banca Antoniana Popolare Veneta for EUR 411-million.

• In 2007, MPS acquired 55% of Biverbanca, the new name for Cassa di Risparmio di Biella e Vercelli from rival Intesa Sanpaolo for EUR 399-million (USD $570-million). Biverbanca had 105 branches in north-western Italy.

• Also in 2007, MPS acquired AXA SIM SpA for EUR 50-million (USD $69-million), an asset manager with EUR 1.9-billion in assets under management.

• In early 2008, MPS made its boldest, yet most disastrous purchase when it spent EUR 9.0-billion (USD $13.2-billion) to buy Banca Antonveneta from Spain’s Banco Santander. Santander had only just taken control of Banca Antonveneta a few months earlier when it and Royal Bank of Scotland and Belgium’s Fortis jointly acquired Dutch banking giant ABN AMRO Holding NV for EUR 70-billion (USD $101-billion). ABN AMRO had acquired Banca Antonventa back in 2005 and was the first foreign bank to control a major Italian bank. Banca Antonveneta had 1,000 branches. This purchase made MPS one of the largest banking groups not just in Italy but in all of Europe by assets.

• Shortly after that, MPS suffered devastating losses from derivative trading and careless lending made earlier in the decade.

• In 2012, MPS unloaded its 60% stake in Biverbanca for EUR 205-million.

• In 2013, MPS received EUR 4.1-billion of state aid from the Italian government to avoid a collapse.

• In January 2016, MPS’s had non-performing loans totalling EUR 40.0-billion (USD $43.6-billion). Meanwhile, MPS shares tumbled and valued the entire bank at only EUR 2.2-billion.
• In December 2016, MPS failed to raise new capital from private investors.
• In July 2017, MPS together with the Italian government and EU agreed and approved a broad-range re-capitalization and nationalization rescue for the bank. Under the plan, the Italian state would inject EUR 5.4-billion (each EUR = USD $1.1350) into MPS, and junior bondholders of the bank would contribute another EUR 2.7-billion by converting their debentures into equity, which would make up the EUR 8.1-billion of capital required. The Italian state would control 70% of the re-capitalized MPS. Meanwhile, EUR 28.6-billion of bad loans would be removed from the bank's balance sheet into a separate "bad bank." MPS also agreed to close 600 branches, cut 5,500 jobs and cap its top executives' remuneration.
• In late 2020, the Italian government began to search for a buyer for its 68% stake in Monte dei Paschi di Siena. Under the terms of the state bailout negotiated with the EU competition authorities in 2017, Italy must sell the state holding by the end of 2021. In order to make the MPS more attractive, the bank intends to offload EUR 8.1-billion (USD $9.53-billion) of impaired loans to state-owned bad loan manager AMCO before the sale.
• In July 2021, UniCredit announced that it was in talks to acquire the 64% stake of ailing Italian rival Banca Monte dei Paschi di Siena (MPS) from the Italian government, on the condition that the Italian state take up the liability of MPS' bad loans. At the time, it was widely believed that MPS would cease to exist as a stand-alone entity soon. However. talks ended in October 2021, when the Italian Treasury valued the components of MPS selected by UniCredit to be worth between EUR 3.6-billion and 4.8-billion, but UniCredit was only offering EUR 1.3-billion.
• Following a doubling of its share prices in 2024, MPS made a surprise EUR 13.3-billion (USD $14.0-billion) offer in January 2025 to take over Italian investment bank Mediobanca. Between November 2023 and November 2024, the Italian Treasury reduced its stake in MPS from 64% to 11.7% in a series of sales to institutional investors. It was believed that the Italian state purposely selected who was allowed to buy minority stakes in MPS. MPS' offer to acquire Mediobanca was also believed to be a government strategy to create a third major player in the Italian banking sector to challenge UniCredit and Intesa Sanpaolo. To starve off MPS' offer, Mediobanca in April 2025 launched its bid to buy 100% of private bank Banca Generali for EUR 6.3-billion (USD $7.15-billion) from insurer Assicurazioni Generali SpA, which owned 50.2% of Banca Generali. Mediobanca itself owned 13% of Assicurazioni Generali.

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Italy Bank Mergers & Acquisitions (Sanpaolo IMI)

Photo: A quasi-banknote that was issued by Istituto Bancario San Paolo di Torino in the 1970s.

Sanpaolo IMI SpA

As a banking holding company, Sanpaolo IMI had a very brief existence.  It was created in 1998 and in 2007, it merged with Banca Intesa to form Intesa Sanpaolo.  However, like many Italian banks, some predecessors of Sanpaolo IMI can trace their histories back over four centuries to the Italian Renaissance period. Sanpaolo IMI was formed from four regional banking groups: Istituto Bancario San Paolo di Torino, Istituto Mobiliare Italiano, Cardine Banca and Banco di Napoli.

A Few Words about Italian Banks’ Renaissance Origins

Many Italian banks can trace their histories to as far back as the 15^th century when local municipalities or the Roman Catholic Church established individual monti di pietà (“mounts of pity”, or “mounts of compassion”) as charitable foundations that granted small loans to the poor in return for collateral. The goals of the monti di pietà are to fight usury and poverty, to encourage savings and improve the social conditions of the poor, as well as to stimulate economic development. In many cases, the monti di pietà also accepted deposits and re-lent the funds to borrowers.

Over the centuries, many of these charity lenders became casse di risparmio (savings banks) but maintained their original social mandates of charity for the poor, as well as to promote art, education, health, scientific research; to conserve cultural and religious heritage; or to develop public utilities.  The unique dual objectives of Italy’s savings banks, while honourable, created a banking system that was backward, fragmented, bureaucratic, unprofitable and uncompetitive.

As the European Union prepared to break down trade barriers based on national borders in the 1990s, it was clear to the Italian government that its fragmented banking system would be taken over by the much larger and efficient banks from Great Britain, France and Germany.  A series of banking reform acts, most notably the Amato Act of 1990 and the Ciampi Act of 1998, were implemented to privatize the state-owned or public-law banks and to foster amalgamation of the regional banks into much larger national banks.

Istituto Bancario San Paolo di Torino SpA

The Sanpaolo side of Sanpaolo IMI is one of the oldest credit providers in the world.   In 1563, a brotherhood known as the Compagnia della Fede Cattolica sotto l’Invocazione di San Paolo was established in Torino (Turin). A few years later, the charity founded a Monte di Pietà (singular of monti di pietà) to provide charitable loans at low-interest rates to the poor on the pledge of personal belongings as explained earlier.

The Monte di Pietà di San Paolo provided an alternative to usury, particularly for Turin’s tradesmen and artisans, and marked the beginning of San Paolo’s long history as a credit provider.  During the Renaissance period, Turin was a major trading centre in Europe, and San Paolo grew in importance such that by the second half of the 17^th century, it was granted the administratorship of the public debt for the Savoy region. 

By the 19^th century, San Paolo had evolved into a lender in the modern banking sense.  It rode on Northern Italy’s rapid transformation into an industrial economy and became a leading bank.

The 20^th century was a turbulent one for Italy: in 1911, the Italo-Turkish War broke out, to be followed by World War I, both of which depleted Italy’s coffers.  In 1921, when a major industrial-financial conglomerate (Ansaldo Group-Banca Italiana di Sconto) failed, the Italian state intervened and rescued the group, commencing the country’s long history of injecting state funds to rescue failing industries.   Then in 1922, Benito Mussolini took over the country and began his fascist dictatorship.  By the 1930s, poor administration combined with the international economic depression led to the failures of many Italian enterprises. In 1933, the government stepped in and created IRI (Istituto per la Ricostruzione Industriale) to take over several major ailing banks.  The 1936 Banking Act then set strict regulations on the banks’ operations.  Stunningly, about 80% of Italy’s banking sector was directly or indirectly run by, or relied upon the government for capital, and this practice only ended in the 1990s. 

During the 1930s, Istituto Bancario San Paolo di Torino itself became a public-law bank, which means that it had no outstanding share capital and relied on customer deposit as its sole capital base.  Technically the Italian Treasury was the resort should additional capital be required, but in reality all Italian state-controlled or public-law banks had little access to capital for decades until they were privatized in the 1990s.

Fascist Italy suffered further setbacks when it joined Nazi Germany in declaring war on France, Great Britain and the United States in 1940.  Mussolini financed the war machine by basically revving up the money-printing machines, which led to hyperinflation and a collapse of the Italian lira.  Following the war, Italy continued to suffer from high inflation, slow economic growth, a weak currency, and perpetual budget deficits. The government’s response was to impose more restrictions on money supply, lending and foreign exchange.  Over time, Sanpaolo di Torino nevertheless became the leading retail bank in northwestern Italy.

Reforms were finally brought in in 1982 when the IRI began to raise funds by issuing bonds to re-capitalize its state-owned banks. In 1990, in preparation of a “single-market” economy within the European Community, further changes were introduced when Italian banks were required to restructure into the joint-stock company model (with limited liabilities) from their public-law status. In 1992, San Paolo di Torino officially became Istituto Bancario San Paolo di Torino SpA, and 21% of the shares were floated publicly.

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Istituto Mobiliare Italiano SpA (IMI)

Compared to other Intesa Sanpaolo constituents, Istituto Mobiliare Italiano's establishment in 1931 was decidedly contemporary.  As mentioned earlier, Italy’s large commercial banks became insolvent in the late 1920s as the economy faltered.  New government regulations then forbade the commercial banks from making medium- and long-term loans to Italy’s enterprises.  The government then created the Istituto Mobiliare Italiano to provide medium- to long-term financing to Italy's struggling industries. In 1947, IMI took on the additional responsibility of managing and coordinating foreign aid in rebuilding Italy following World War II.

Over time, IMI became a state-owned merchant and investment bank: making long-term loans, subscribing to equity stakes, and underwriting securities for corporate Italy.

In 1991, like other state-owned or public-law financial institutions, IMI was converted to the joint-stock form and became Istituto Mobiliare Italiano SpA.  In 1994, IMI was listed on the stock exchange as a final step towards a full private-sector bank.

 Holding Cardine Banca SpA

The components that eventually became Cardine Banca are too numerous and small to be explained in details in this publication, and only a brief summary of the bank’s genealogy will be provided.  In 1822, savings banks Cassa di Risparmio di Padova and Cassa di Risparmio di Rovigo were established in the Italian-speaking Veneto region of the Habsburg Empire.  In 1928, they consolidated into the Cassa di Risparmio di Padova e Rovigo.  In 1994, C.R. di Padova e Rovigo joined forces with Cassa di Risparmio di Venezia (founded 1822) and Banca Agricola di Cerea to become the Casse Venete group.  In 1998, yet two more savings bank, C.R. di Gorizia and C.R. di Udine e Pordenone, joined the Casse Venete group, which by now is a major regional bank in the northeast corner of Italy.

Meanwhile, along Italy’s Adriatic Sea coast, the Banca Popolare Pesarese was established in 1875.  It in 1989 merged with Cooperativa di Bagnacavallo to form the Banca Popolare Pesarese e Ravennate.  In 1994, Banca Popolare Pesarese e Ravennate combined with Banca Popolare Abruzzese Marchigiana and took up the new name of Banca dell’Adriatico.   In 1997, Banca dell’Adriatico became an “SpA” when it obtained joint-stock status.

In the Emilia-Romagna region, influential civic leaders with the support of the Catholic Church founded the Cassa di Risparmio in Bologna in 1837.  To comply with the Amato Act, C.R. in Bologna became a joint-stock company and a parent company known as Gruppo Bancario Casse Emiliano Romagnole SpA (or CAER for short) was formed in the early 1990s.  In 1997, a frenzy of regional bank mergers saw CAER acquiring Banca dell’Adriatico.

In 2000, the Casse Venete group merged with the CAER group and adopted the new name Holding Cardine Banca SpA.  The bank’s network spanned the entire northern Italy.

Banco di Napoli SpA

Banco di Napoli can loosely trace its history back to the 1539 founding of a Monte di Pietà in Naples as a philanthropic pawnbroker.  Between 1587 and 1640, another seven credit institutions were established in southern Italy, and these eight banks eventually became Banco Nazionale di Napoli in 1794.  During the 19^th century, military conflicts in the Italian peninsula led to the bank’s shutdown and reorganization under a different name.  When the various warring city states were unified into the Kingdom of Italy in 1861, the modern Banco di Napoli was reborn.

In 1926, the bank was turned into a public-law institution following the decade-long economic crisis.  In 1929, it consolidated several other ailing banks, becoming the largest bank in southern Italy.

During the early 1990s, the bank’s poor governance and another prolonged economic slump once again made Banco di Napoli financially unstable just ahead of the launch of EU’s “single-market” model and dismantling of trade and economic protection based on national borders.  A series of reforms was carried out, starting with the 1991 conversion of Banco di Napoli into the “SpA” joint-stock format.  The Italian government then stripped out the bank’s bad loans into a “bad bank,” to be managed and wound down gradually.  Meanwhile, the Treasury injected billions of new capital into the bank and transferred its administration and ownership to the newly-privatized insurer Istituto Nazionale delle Assicurazioni (INA, for 51%) and Banca Nazionale del Lavoro (BNL, for 49%).

Recent transaction(s):

• In 1998, Istituto Bancario San Paolo di Torino SpA acquired Istituto Mobiliare Italiano (IMI) SpA to form Sanpaolo IMI SpA, becoming the largest bank in Italy at the time.
• In 1999, Sanpaolo IMI launched a hostile offer for Banca di Roma SpA for Eur 7.5-billion (USD $8.2-billion) but Sanpaolo IMI's bid failed.
• In 2000, Italian insurance giant Assicurazioni Generali SpA launched a Eur 12.2-billion (USD $13.0-billion) hostile bid to acquire rival Istituto Nazionale delle Assicurazioni SpA (INA).  Sanpaolo IMI had previously pursued a friendly combination proposal with INA to create a bancassurance giant.  Eventually, Sanpaolo IMI agreed to let INA merge with Generali, in return for acquiring INA’s 51% stake in Banco di Napoli.  Sanpaolo IMI subsequently launched an offer to acquire the 49% of Banco di Napoli held by Banca Nazionale del Lavoro.
• In 2001, Sanpaolo IMI bought a 10.9% stake in Holding Cardine Banca for ITL 1-trillion (USD $450-million). Cardine was the result of the merger between Casse Venete and Casse Emiliano Romagnole (CAER).
• In 2002, Sanpaolo IMI bought the remaining stake in Cardine Banca for USD $5.4-billion.
• Between 2000 and 2005, Sanpaolo IMI acquired a controlling stake in Cassa dei Risparmi di Forlì.
• In 2006, Sanpaolo IMI bought 87% of Panonska Banka from the Serbian government for Eur 122-million. Panonska Banka had 65 branches.
• In 2006, Sanpaolo IMI bought 80% of Egypt’s Bank of Alexandria from the Egyptian government for USD $1.6-billion. Bank of Alexandria had 188 branches and a 6.8% market share in the country.
• In 2007, Sanpaolo IMI was taken over by Banca Intesa for Eur 31.5-billion (USD $40.0-billion).  The new company became known as Intesa Sanpaolo.

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