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Wouldn’t it be wonderful if the oldest bank in the world became the newest?

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I’m working with a cryptobank start-up, and we’re looking at options for licensing. Various countries have various attractions, with some more attractive than others. I won’t go into the nuances of the details as it’s all under wraps, but one of the founders turned to me and asked if there might be a good licensed bank that they could buy from the get-go. It would fast-track the startup and get them a license straight away, rather than messing about with the lengthy regulatory process of getting approvals. I said: Monte Dei Pashi di Sienna, an Italian bank that’s up for sale, and has been distressed for several years, ever since Europe’s Sovereign Debt crisis.

The interesting thing about this proposition is that we would be launching Europe’s newest bank by acquiring the world’s oldest bank. Monte Dei Pashi di Sienna was established in 1472 and is the oldest continually running bank in the world.

A brief overview from Wikipedia:

Banca Monte dei Paschi di Siena is known as BMPS or just MPS, is an Italian bank. Tracing its history to a mount of piety founded in 1472 (552 years ago) and established in its present form in 1624 (400 years ago), it is the world's oldest or second oldest bank, depending on the definition, and the fifth largest Italian commercial and retail bank.

In 1995, the bank (then known as Monte dei Paschi di Siena) was transformed from a statutory corporation to a limited company called Banca Monte dei Paschi di Siena (Banca MPS). The Fondazione Monte dei Paschi di Siena was created to continue the charitable functions of the bank and to be, until the bailout in 2013, its largest single shareholder.

According to research by Mediobanca and a press release issued by Banco BPM, Banco BPM overtook BMPS as the third largest commercial banking group in Italy (in terms of total assets) on 31 December 2016, after Banco BPM's formal formation on 1 January 2017. In 2016–17, BMPS was struggling to avoid a collapse, and it was bailed out again by the Italian government in July 2017.

On 5 October 2018, BMPS announced the sale of its Belgian subsidiary, Banca Monte Paschi Belgio (BMPB), to a company participated in by funds managed by Warburg Pincus. The sale price was set at €42 million, subject to an adjustment mechanism.

In 2020, BMPS had approximately 1,400 branches, 21,000 employees and 3.9 million customers in Italy, as well as branches and businesses abroad.

The good news is that, after the struggles of the last ten years, the bank has bounced back with record profits in 2023:

  • Revenue: €3.30b (up 25% from FY 2022)
  • Net income: €2.05b (up from €204.7m loss in FY 2022)
  • Profit margin: 62% (up from net loss in FY 2022)
  • EPS: €1.63 (up from €0.97 loss in FY 2022)

The bad news is that may make them a little bit expensive for a start-up buyout. But wouldn’t it be wonderful if the oldest bank in the world became the newest?

#justathought

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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