A banker for Europe has arrived at Monte dei Paschi di Siena – Corriere.it
Al Monte dei Paschi a Martian has arrived. Waiting to understand what the ongoing negotiations with the EU will lead to, which would have liked to see the Italian government leave the capital of MPS on 31 December last, the Ministry of Economy, after a 2021 for ten twelfths dominated by the negotiations with Unicredit and however, which ended with a net profit of 309 million euros, he gave the welcome to Guido Bastianini, calling Luigi Lovaglio in his place. The Martian, in fact.
The mandate has not yet been made explicit, but it is certain that Lovaglio will have to deal with an important capital increase (two, four, eight billion euros: the figures change depending on the interlocutor) and with the remise en forme of a bank which, declared, has declared at least 4,000 redundancies.
A steep climb
Monte dei Paschi has been accumulated for 15 years by an enormous destruction of value. It was November 2007 when it bought without any transaction due diligence the Paduan Antonveneta from Santander. It was the beginning of the end. At that time the stock was worth, at values adjusted by many capital increases, 7,500 euros. Today it is struggling to be worth one euro. In these figures there is both the enormity of the disaster caused mainly by the management of Giuseppe Mussari and Antonio Vigni, and the steepness of the climb that awaits Lovaglio. Putting the cumbersome past behind him, Lovaglio seems to Alessandro Rivera, general manager of the Treasury and first representative of the public shareholder, as the right manager to give Monte a future. A future independent, autonomousat least for now, hoping that the European Union agrees not to set the date of sale which, as the days go by, are an element that inevitably plays against the interest of the seller.
Lovaglio appeared to the Italian public with the recent management of Credito Valtellinese. landed in 2018 in Sondrio coming, if not from Mars, from a twenty-year experience in Eastern Europe. Raised in a bank, where he entered the eighteen-year-old fresh from maturity and before graduating in Economics and Commerce at the Unicredit office in via Monte Grappa, Bologna, it was September 1973, he climbed all the positions of the profession, from the branch to the management of Pekao , the large Polish bank that belonged to the Unicredit group and had 18,000 employees, 5 million customers and a market capitalization of 12 billion euros.
Today, all Unicredit is worth 35, Banco Bpm 5. When, in 2017, Jean Pierre Mustier in the midst of the alienation of resource of Piazza Gae Aulenti, who starting from Pioneer arrived at Fineco passing through the picture gallery, also got rid of Pekao, Lovaglio understood that it was time to leave the group.
The year after having had the big opportunity with Creval in Valtellina and transformed Credito Valtellinese, which was one of the many Italian banks in crisis of results and capital, into a small jewel that Credit Agricole pays 12.50 euros for share, at the end of a takeover bid that saw the French credit giant revise its original offer by 19 per cent, up to an overall value of the $ 1 billion Creval at the beginning of 2021. It was Lovaglio’s masterpiece, which he succeeded in his design without touching the staff, not taking any manager with him, giving value to internal resources, banning waste and following two guidelines: pragmatism and sustainability. Perhaps this was what convinced Rivera, the hope of replicating that success that no one had anticipated.
Monte today is struggling to capitalize on a billion euros and if its strength has always been the commercial network in these 15 disastrous years, the staff who have been able to be a point of reference for customers, now we need something more, different.
Lovaglio transformed Creval on a specific mandate from the then first shareholder of the bank, Denis Dumont. Will he have the same type of mandate from the Italian government? A mandate so broad that it made him say he had an entrepreneurial view of his position? Certainly, some variables compared to the past will change. Not only because of the size of the recapitalization intervention requested, but also because Monte dei Paschi is now over-structured with respect to the needs of the business added to the push of digital. Here, one of the possible challenges is precisely that number: 4,000 redundancies all voluntary and to be agreed with the trade unions, the cost of which has been estimated at approximately 950 million euros and which from 2026 would bring 315 million savings, as explained by Guido Bastianini to the Commission of investigation into banks chaired by Carla Ruocco, in November 2021.
For his part, Lovaglio has shown that he knows how to speak with facts, by example. In 2020, in the darkest moment of the pandemic, when the emergency led to think of the worst, he was locked up for 45 consecutive days in the Creval training center, in Tresivio, near Sondrio, to govern the bank from the highest point to the operating. Now I have to face other types of emergency and solve all the knots that Monte has in the past, from the type of bank it wants to be, to the rationalization of the structure, also passing through Widiba, whose mission.
Agile, fast, efficient
Those who know him are betting that once again his recipe will aim at extracting value from the Monte dei Paschi activities, increasing the profitability and efficiency of the machine. When he addressed his Creval colleagues, he invited them to be agile, quick and efficient. It is much more difficult to do so in Siena, where there are twenty thousand colleagues and the roots lie in Piazza del Campo, wrapped in a inheritance which makes it difficult for what remains the oldest bank in the world to look forward. Yet Rivera’s choice seems to be the right one. The announcement of Lovaglio’s arrival was celebrated on the stock exchange, with the share that in the first session received up to over 9 per cent.
A certificate of trust which is the essential prerequisite for starting a repositioning process that must change the profile of Monte dei Paschi forever. The oldest bank and one of the most difficult in the world.
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