Banca Monte dei Paschi di Siena SpA, the world’s oldest bank and a festering wound of Italy’s financial system, may finally be heading for a sale.
Italian bank UniCredit SpA said Thursday it is entering into exclusive talks with Rome on a possible takeover of the storied Monte dei Paschi, whose history stretches back to its founding in 1472 during the days of the Italian Renaissance.
Once the third-largest bank in Italy, Monte dei Paschi became the poster child for the problems in European banking last decade. It put itself up for sale in 2014 but failed to find a suitor.
After the bank teetered near failure for years, Rome spent €5.4 billion to nationalize it in 2017, equivalent to more than $6 billion at the time. Monte dei Paschi has long been weighed down by mountains of bad loans and a legal scandal. Italy promised European regulators to return Monte dei Paschi to private hands by April 2022.
With the deadline looming, the government has been pushing UniCredit, Italy’s second-largest bank, to do a deal.