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(Bloomberg) — Italian Finance Minister Giancarlo Giorgetti is seeking to sell more shares in Banca Monte dei Paschi di Siena SpA within three months as part of an effort to raise money for Italy’s strained budget.
“We plan on selling a further stake before the end of the year,” Giorgetti said in an interview pre-recorded for Bloomberg’s Future of Finance event in Milan on Thursday. “The market situation of high interest rates allowed Monte Paschi to come out of its problems brilliantly, and our successful stake sales prove that.”
Shares in the Italian bank dropped as much as 3.1% after the comments.
The Monte Paschi placement is part of Prime Minister Giorgia Meloni’s plan to make about €20 billion ($22.1 billion) from selling down Italy’s company holdings and slash its debt. Rome has also partly divested from oil conglomerate Eni SpA and it’s preparing to sell down its stake in Poste Italiane SpA.
Giorgetti on Thursday reiterated previous comments indicating he would like Monte Paschi to be part of banking consolidation in Italy, if and when it plays out.
“Monte Paschi can and must play a role in shaping what the Italian banking sector will become in the future,” he said without going into details. “The idea is to create an industrial project in the medium term.”
Founded in 1472, Monte Paschi was bailed out in 2009 after it was hit by souring loans and ill-fated derivatives deals. It long struggled to turn itself around, but recently has made progress under Chief Executive Officer Luigi Lovaglio. The bank has also benefited from higher interest rates in the euro area.
The government still owns 26.7% in Monte Paschi, down from about 64% when it kicked off the firm’s privatization last year. The sales have yielded almost €1.6 billion in proceeds for Italy so far.
Speaking about the government’s privatization program generally, Giorgetti said that “it will be a particularly intense fall and winter.” He confirmed the government is planning to sell a stake in Poste Italiane by the end of the year.
–With assistance from Donato Paolo Mancini and Antonio Vanuzzo.
(Updates with share price move in third paragraph.)
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