Mps still declining, weighing governance uncertainties

(Il Sole 24 Ore Radiocor) - Banca Mps under the lens at Piazza Affari, after the new, potential twist reported by some newspapers: the current CEO Luigi Lovaglio, who in recent days has been excluded from the list for the renewal of the board of directors presented by the board itself, throws down the gauntlet, with the hypothesis that his name could lead the shortlist of candidates promoted to entrepreneur Giorgio Girondi. To be elected, according to La Stampa, he is counting on both the votes of the market and perhaps those of his partner Delfin, whom he hopes to convince. Mps's shares, meanwhile, have come down about two points, while those of the subsidiary Mediobanca are little moved. In just five days, Mps has lost almost 10%, taking it to its lowest level since last autumn. On the other hand, it will now be necessary to wait for the shareholders' meeting on 15 April for more clarity on governance.

Deutsche Bank banking expert Giovanni Razzoli advises to "remain calm and move forward" and reiterates the price target for Mps at EUR11, with a 'Buy' rating. "The announcement by the outgoing board of directors of Mps of the non-inclusion of the current ceo in the list of candidates for renewal represents a reversal of direction in governance," the expert pointed out, recalling that a new CEO could lead to a revision of the industrial plan presented last week and favourable to the market, given that it envisages generous shareholder remuneration: Lovaglio announced over the span of the industrial plan to 2030 the distribution of 16 billion in dividends.

However, a new manager at the helm of the Sienese bank could 'reduce the already announced coupon distribution, increase the bank's organic growth and focus more on external growth'. This is why the shares have taken the downward path in recent days. "Despite the uncertainty over governance, we have identified more reasons to maintain our 'Buy' rating," Razzoli explained, pointing first of all to "the significant valuation discount compared to other Italian and even European banks. This discount implies thatthe market has already priced in the current uncertainties'.

The fact is that the market continues to wonder about the future governance of the institution and, in the event of a change of CEO, it is also to be seen how the integration between Mps and Mediobanca will proceed, with the marked date of 10 March for the presentation of the exchange for the repurchase and consequent delisting of Piazzetta Cuccia's securities.