Siena loses its grip on world's oldest bank
By Silvia Aloisi and Stefano Bernabei
SIENA, Italy (Reuters) - Siena's 55,000 residents say they fall into three categories: those who work for Monte dei Paschi, those studying to work for it and those who have retired from the world's oldest bank.
But Banca Monte dei Paschi di Siena's ties to the town where it was founded in 1472 are under threat.
Pressed by impatient creditors, its top shareholder - a charitable foundation - is being forced to cut its 49 percent stake by almost a third, loosening Siena's grip on Italy's No.3 lender and potentially leaving it open to takeovers.
For the population of Siena, living amid the medieval city's frescoed palazzi, the enforced sale of the stake in the town's largest employer, known locally as "Babbo Monte", or "Daddy Monte", is nothing short of an earthquake.
"The bank is the jewel in the crown for Siena, it's the pride of the city, the one that created most jobs. Working there is a dream for the young," said Rino Rappuoli, a senior executive at Novartis and one of Siena's most respected figures.
The fault line is the Fondazione Monte dei Paschi, which is controlled by Tuscan politicians and reinvests dividends from the bank in local social and cultural projects.
Between 1996 and 2010, the foundation spent more than 1.3 billion in the province of Siena on projects including a biotech facility and the training of horses for the city's famous horse race, the Palio di Siena.
But as it sought to keep control of the lender, the foundation ran up 1.1 billion euros in debts. It has responded by slashing donations and selling a 15.5 percent stake in the bank to repay a large group of creditors, including JP Morgan, Credit Suisse and Mediobanca. Continued...