ECB says Popolare Sondrio governance has shortcomings: ANSA

ECB says Popolare Sondrio governance has shortcomings: ANSA

The European Central Bank (ECB) has expressed concerns regarding the governance structure of Banca Popolare di Sondrio, according to a recent report from ANSA. The ECB's supervisory review highlighted several shortcomings in the bank's governance framework, which could potentially impact its operational efficiency and risk management practices.

Banca Popolare di Sondrio, one of Italy's leading financial institutions, recently reported a significant 19% increase in its first-quarter net profit, totaling €173.3 million. The bank attributed this growth to strong performance in its core banking business [1]. Despite this positive financial performance, the ECB's review underscored the need for improvement in the bank's governance structure to ensure robust oversight and compliance with regulatory standards.

The ECB's report noted several key areas of concern, including the independence and effectiveness of the bank's board of directors, as well as the adequacy of internal controls and risk management processes. The ECB emphasized the importance of these governance elements in maintaining the stability and resilience of the financial system.

The bank's CEO, Mario Alberto Pedranzini, acknowledged the ECB's concerns and stated that the reported results were a step forward in implementing the new business plan for 2025-2027. The bank has also appointed Pierluigi Molla as chairman until the end of his mandate in 2026, signaling a commitment to addressing governance issues [1].

In response to the ECB's review, Banca Popolare di Sondrio has stated that it is taking proactive measures to enhance its governance framework. The bank is expected to provide more details on its plans to address the ECB's concerns in the coming months.

The ECB's supervisory review underscores the importance of strong governance structures in the banking sector. As Banca Popolare di Sondrio continues to navigate the challenges posed by the ECB's findings, investors and financial professionals should closely monitor the bank's progress in addressing these governance concerns.

References:
[1] https://www.reuters.com/business/finance/italian-bank-popolare-sondrio-records-19-rise-first-quarter-net-profit-2025-05-06/