Does the Delfin Family's Push Mean Monte Paschi Is a Bargain?

The core question here is simple: are the Del Vecchio heirs pushing to sell because they see real value, or just because they want cash? This isn't a new debate. Five of the eight equal shareholders in the family holding firm, Delfin Sarl, are now pressing the board to sell its financial assets, a move that could include the 17.5% stake in Monte Paschi. The board, led by CEO Francesco Milleri, denies any talks with UniCredit to sell that stake, claiming it acts in Italy's best interest. This internal pressure is a classic "kick the tires" moment, but the timing is interesting given the bank's recent performance.

The family's push is not a sudden cash grab. Similar talks surfaced last year, indicating a persistent tension over the holding company's portfolio. Yet, the bank's trajectory suggests the heirs might be missing an opportunity. Monte Paschi has been on a turnaround path, recently becoming Italy's third-largest lender after its aggressive acquisition of Mediobanca. The bank's management, including CEO Luigi Lovaglio, is focused on securing its future, even as it faces scrutiny from Milan prosecutors over the Mediobanca deal. Delfin's own statement this week emphasized its long-term view, noting the bank's performance in line with goals relating to profitability.

So, what's really driving the heirs? The fact that the board doesn't need a unanimous vote to act means the pressure from five shareholders could force a decision. There's also a potential incentive: the shareholders themselves could incentivize Milleri and the board to sell the holdings in exchange for a bonus based on capital gains realized in recent years. This points to a desire for liquidity, not necessarily a belief that Monte Paschi is overvalued. The bank's recent share price gains, lifted by speculation of a UniCredit deal, show the market sees potential. The family's push, therefore, looks less like a value call and more like a family seeking to cash out a winning hand.

Monte Paschi's Real-World Health Check

The family's push to sell is a distraction from the bank's actual business. To judge if Monte Paschi is a bargain, you have to kick the tires on its real performance. The numbers show a bank in the middle of a major, messy transformation.

On the surface, the commercial momentum is strong. For the first nine months of 2025, net profit surged 17.5% year-over-year to €1.366 billion. That's a solid beat, driven by fee growth and a disciplined cost control that kept the cost/income ratio at 46%. The bank has also been aggressive on savings, with total commercial savings rising by over €7 billion since late 2024. This suggests the core banking operations are generating real cash.

But the real story is the integration of the Mediobanca acquisition, which made Monte Paschi Italy's third-largest lender. The merger is complete, but the "smoothly progressing" integration is a massive undertaking. The most telling sign of the friction is the scale of planned layoffs. The bank is facing massive layoffs as part of a planned corporate merger. This isn't a minor reorganization; it's a fundamental restructuring of two different banking cultures and workforces. The cost savings are a goal, but the human and operational cost of that change is a clear red flag for the quality of the combined business.

The bottom line is a bank showing strong profit growth from its existing operations while simultaneously undergoing a painful, expensive integration. The new group business plan, due in the first quarter, will be the next test of whether this merger can truly create value or just consume it. For now, the strong profit numbers are real, but they are being generated against a backdrop of significant internal upheaval. That's a setup where the upside is tied directly to a successful, low-cost integration.

The UniCredit Angle and Market Smell Test

The market's reaction to the rumor is the clearest signal here. When news broke of potential talks between Delfin and UniCredit, Monte Paschi's shares climbed. That's a classic "smell test" for value. Investors were betting that a deal with Italy's second-largest bank could unlock something the current setup isn't. The mere speculation drove the price higher, suggesting the market sees real utility in Monte Paschi's new scale and recent performance, regardless of the ownership uncertainty.

UniCredit itself is in a strong position to make a move. The bank just delivered record results, with net profit hitting €2.6 billion in the third quarter and a return on equity of 19.1%. Its capital buffer is solid, with a CET1 ratio of 14.8%. This financial firepower gives UniCredit the potential to make a bid. Yet, the bank has publicly dismissed the speculation as "unjustified" and says no talks are underway. That's a standard PR move, but it doesn't erase the underlying logic: UniCredit is a major player with a proven track record of consolidation, and Monte Paschi's new size as Italy's third-largest lender makes it a strategic asset.

The tension here is between the bank's stated position and the market's appetite. UniCredit's denial is a formal statement, but the market's positive reaction to the rumor shows it's already pricing in the possibility. For now, the speculation is just that-a rumor. But it highlights a key point: if UniCredit were to step in, it would be buying a bank that's already showing strong profit growth and has a clear path to scale. The family's push to sell may be about liquidity, but the market's vote is a vote for the business's future.

Catalysts, Risks, and What to Watch

The family's push is now heading toward a formal decision point. The key catalyst is a Delfin shareholders' meeting expected in late March, where the financial holdings sale could be formally discussed. This meeting is the first real test of whether the pressure from five equal heirs can overcome the board's resistance. The board doesn't need a unanimous vote, so the outcome hinges on whether the remaining three shareholders side with the push or with CEO Francesco Milleri's stated view that the bank is on a strengthening path.

The primary risk is that the family's push succeeds. Forcing a sale of the 17.5% stake in Monte Paschi to a new owner, whether UniCredit or another buyer, would disrupt the bank's current turnaround. The integration of the Mediobanca acquisition is already a massive, costly undertaking, with massive layoffs as part of a planned corporate merger. A change in the top shareholder could introduce new strategic priorities or a different timeline for the integration, creating uncertainty at a critical moment. The market's recent rally on speculation shows it values the current setup; a forced sale could reverse that confidence.

What to watch is the official agenda for that March meeting and any shift in tone from UniCredit. Delfin's denial of talks is a formal statement, but the bank's recent record results and solid capital position give it the means to act if it chooses. Monitor UniCredit's public stance for any subtle change, as the market has already priced in the possibility. For now, the setup is a classic tension between family liquidity needs and the bank's strengthening business. The March meeting will be the first real-world test of which force wins.