Business

Monte dei Paschi Launches €13.3 Billion Bid for Mediobanca in Surprise Banking Shake-Up

Published

2 months ago

January 24, 2025

RTX

Italy’s oldest bank, Monte dei Paschi di Siena, unveiled a €13.3 billion takeover bid for investment bank Mediobanca on Friday, a move poised to reshape the nation’s banking landscape.

The offer values Mediobanca shares at €15.99 each, a 5% premium on Thursday’s closing price. Under the deal, Mediobanca investors would receive 23 Monte Paschi shares for every 10 Mediobanca shares held. The Tuscan lender projects the merger could generate €700 million annually in pre-tax synergies while maintaining a strong capital position.

Shares of Mediobanca surged 6.5% in morning trading on Friday following the announcement, while Monte Paschi shares fell by 4%.

A Move Toward Profitability

Monte Paschi, with a market capitalisation of €9 billion, is smaller than Mediobanca, valued at €12.7 billion. Despite its historical struggles, Monte Paschi has undergone significant restructuring under CEO Luigi Lovaglio, positioning itself for growth after years of financial challenges.

The bank’s surprise bid comes as the Italian government continues efforts to re-privatise Monte Paschi, which has been under state control since a costly bailout in 2017. The Italian Treasury, once a 68% stakeholder, has reduced its share to 11.7%, seeking strategic partnerships for the bank.

Recent changes in Monte Paschi’s shareholder structure have brought prominent figures into the fold. Delfin, the holding company owned by the family of the late billionaire Leonardo Del Vecchio, has tripled its stake in the bank to nearly 10%. Roman tycoon Francesco Gaetano Caltagirone holds an additional 5%. Together, Del Vecchio and Caltagirone also control close to 30% of Mediobanca, positioning them as central players in the merger.

Impact on the Italian Banking Sector

The proposed deal adds to the competitive dynamics in Italy’s banking sector, which has seen a flurry of activity in recent months. The government initially aimed to merge Monte Paschi with Banco BPM to create a national champion capable of rivaling Intesa Sanpaolo and UniCredit. However, those plans unraveled when UniCredit pursued its own merger with German lender Commerzbank and launched a hostile bid for Banco BPM in November.

Monte Paschi’s bid for Mediobanca signals its ambition to solidify profitability and maintain a robust capital base. Analysts say the merger could enhance both banks’ competitiveness in the evolving financial landscape.

As Italy’s banking sector undergoes further consolidation, this unexpected development underscores the shifting priorities of stakeholders and government policymakers. Whether the deal proceeds will depend on regulatory approvals and shareholder support, with the potential to transform Italy’s financial sector.

Business

Global Markets React to Trade Tensions as Investors Weigh Trump’s Tariff Moves

Published

5 hours ago

March 11, 2025

RTX

Global stock markets remained volatile on Tuesday as investors responded to escalating trade tensions and economic uncertainty following recent remarks by US President Donald Trump. Concerns over potential tariffs and economic slowdown have sent Asian, European, and US markets into a downturn, with tech stocks and major indices experiencing sharp losses.

European Markets Open Mixed Amid Tariff Concerns

European markets opened with mixed performances on Tuesday, as investors assessed the potential impact of Trump’s tariff policies on global trade and company earnings.

FTSE 100 (UK) dipped 0.10% in early trading.
DAX (Germany) rose 0.6%, while CAC 40 (France) gained 0.4%.
The pan-European STOXX 600 fell 0.2%, reflecting broader market unease.

Market analysts suggest that Trump’s comments about a “period of transition” have raised fears of an economic slowdown, leading investors to adjust their expectations and pricing strategies.

“Trump’s willingness to endure short-term economic pain for long-term structural gains is being priced into the markets. Investors can no longer assume his policies will always favor stock market performance,” said Kyle Chapman, an FX analyst at Ballinger Group.

Asian Markets See Extended Sell-Off

Asian markets followed Wall Street’s lead, with stock indices experiencing losses overnight amid growing fears of a prolonged US-China trade war.

Nikkei 225 (Japan) dropped 0.6% to its lowest level in six months, though it recovered from an earlier 2% decline.
Shanghai Composite (China) rose 0.4%, buoyed by government measures aimed at stabilizing the slowing economy.
Hang Seng (Hong Kong) remained flat at 23,782.14.
S&P/ASX 200 (Australia) declined 0.9%, while Kospi (South Korea) fell 1.2%.

According to IG analysts, the global market sell-off is being exacerbated by recession fears linked to Trump’s tariff rhetoric.

Wall Street Suffers Steep Decline

The US markets closed sharply lower on Monday, with tech stocks leading the downturn.

Nasdaq Composite plummeted 4%, marking its biggest single-day loss since 2022 and wiping out $1.1 trillion (€710 billion) in market value.
S&P 500 declined 2.7%.
Dow Jones Industrial Average fell 2.1%.

Goldman Sachs also cut its US growth forecast for 2025, revising expectations from 2.4% to 1.7%, adding to investor concerns.

The “Magnificent Seven” tech stocks—including Apple, Microsoft, and Tesla—were among the hardest hit, as analysts warned that higher tariffs could erode profit margins and slow earnings growth.

“Markets are now facing weaker earnings prospects, alongside the added cost burden created by tariffs,” said Kyle Rodd, a senior analyst at Compital.com Australia.

Commodities and Currency Markets React

Oil Prices:
- US crude oil rose 0.42% to $66.31 per barrel.
- Brent crude climbed 0.3% to $69.50 per barrel.
Gold Prices:
- Gold increased 0.5% to $2,900.4 (€2,661.6) per ounce, hovering near record highs.
Currency Markets:
- EUR/USD pair rose 0.6%.
- EUR/GBP edged up 0.2%.

Corporate Earnings Updates

Volkswagen shares gained 1.6% on Tuesday morning after the company released its full-year 2024 earnings, despite reporting a 15% drop in annual profits. The German automaker remains optimistic about revenue growth in 2025.

Other major earnings reports expected today include Lego, Persimmon, and Leonardo.

Outlook: Volatility Expected to Continue

With global trade uncertainty, inflation concerns, and weaker growth forecasts, analysts anticipate that market volatility will persist in the coming weeks. Investors will closely watch further developments in US trade policy, corporate earnings reports, and central bank moves for clues on economic stability.

Business

BBVA to Launch Crypto Trading for Customers in Spain

Published

1 day ago

March 10, 2025

RTX

Spanish banking giant Banco Bilbao Vizcaya Argentaria (BBVA) is set to introduce cryptocurrency trading services in Spain, allowing customers to buy, sell, and manage Bitcoin and Ether transactions directly through the bank’s mobile app.

The move follows BBVA’s approval from the Spanish Securities and Exchange Commission (CNMV) under the European Markets in Cryptoassets Regulation (MiCA), which requires banks to secure regulatory clearance before offering crypto-related services.

Gradual Rollout of Crypto Trading

BBVA announced that the service will first be introduced to a small group of users before gradually expanding to all private banking customers in Spain over the next few months.

“Customers in Spain will be able to manage their crypto trading orders within the app, alongside their accounts, investments, and regular banking activities,” the bank said in a statement.

This development places BBVA among the frontrunners in Europe’s crypto banking sector, alongside Germany’s Deutsche Bank and France’s Société Générale, both of which have taken steps to integrate digital assets into traditional banking services.

BBVA’s Global Crypto Expansion

BBVA has already been operating crypto trading services in Switzerland since 2021 and Türkiye since 2023, where regulatory frameworks were established before MiCA became fully effective in December 2024.

Unlike some financial institutions that rely on third-party custodians, BBVA emphasized that it will use its own cryptographic key custody platform to safeguard customers’ assets.

“BBVA will maintain full control over safeguarding its customers’ crypto assets without relying on external providers,” the bank stated, reinforcing its commitment to security and regulatory compliance.

A Growing Trend Among Banks

The introduction of crypto services by traditional financial institutions reflects the growing mainstream adoption of digital currencies, particularly as regulatory frameworks in Europe and the U.S. evolve.

While BBVA’s crypto trading service will be available upon customer request, the bank clarified that it will not provide advisory services on crypto investments.

With this move, BBVA strengthens its position in Europe’s digital asset sector, potentially setting the stage for other banks to follow suit as cryptocurrency adoption continues to expand.

Business

China Imposes Retaliatory Tariffs on Canadian Goods Amid Escalating Trade War

Published

1 day ago

March 10, 2025

RTX

China has announced retaliatory tariffs on Canadian agricultural and seafood products, intensifying trade tensions between the two nations. The move, revealed on Saturday, comes in response to Canada’s tariffs on Chinese electric vehicles and metals imposed in October last year.

Beijing will enforce 100% tariffs on rapeseed oil, oil cakes, and peas, along with a 25% import levy on pork and aquatic products from March 20, further straining economic ties between the two countries.

Tit-for-Tat Tariffs Escalate Trade Conflict

The trade dispute between China and Canada has been growing since October 2023, when Ottawa imposed a 100% tariff on Chinese electric vehicles and 25% levies on Chinese steel and aluminum.

China’s Ministry of Commerce condemned Canada’s measures as violations of World Trade Organization (WTO) rules, calling them “acts of protectionism” that restrict Chinese exports and damage the country’s legitimate trade interests.

Impact on Canadian Exports

Canada’s rapeseed (canola) industry is expected to be heavily impacted by the new tariffs. In 2023, the crop generated C$13.6 billion (€8.73 billion) in sales, while Canadian canola meal and oil exports to China were valued at C$920.9 million (€591.3 million) and C$21 million (€13.5 million) respectively in 2024.

Additionally, Canada’s pea exports to China reached C$303 million (€194.5 million) last year. The new tariffs could severely disrupt trade flows, affecting Canadian farmers and exporters who rely on the Chinese market.

The Canadian Global Affairs Ministry denounced China’s tariff announcement as “unjustified”, stating that Canada rejects China’s findings and remains open to dialogue. The ministry accused China of unfair market practices, saying that its policies artificially lower production costs and distort global markets.

Wider Global Trade War Intensifies

China’s latest trade action follows a string of tariff hikes introduced by former US President Donald Trump last week, which included 25% duties on Canadian and Mexican imports and a doubling of tariffs on Chinese goods to 20%.

Shortly after, Trump granted a one-month exemption on auto and agricultural tariffs for Canada and Mexico under the USMCA agreement, as both countries signaled a willingness to reassess tariffs on Chinese imports.

China’s Economic Struggles Deepen

The trade war escalation comes amid economic uncertainty in China, with consumer prices falling 0.7% year-over-year in February, marking the first negative inflation rate in 13 months.

At its annual government meeting last week, Beijing set its 2025 GDP growth target at 5% and unveiled a trillions-of-yuan stimulus package to boost economic activity. However, analysts warn that sluggish domestic demand and mounting trade tensions could make achieving this target difficult.

To support economic recovery, China has pledged a “proactive fiscal policy and moderately loose monetary policy”, increasing its budget deficit to 4% of GDP—the highest in three decades.

Market Reaction and Currency Decline

Financial markets reacted negatively to the ongoing trade tensions. On Monday, the Chinese Yuan fell 0.22% against the US dollar, while Hong Kong’s Hang Seng Index slipped 1.7% in early trading.

Despite the recent downturn, Chinese markets have been rallying this year, partly fueled by the January launch of DeepSeek’s AI model, a Chinese tech startup competing with US AI firms.

As global trade disputes intensify, China and Canada remain locked in a growing economic standoff with potential long-term impacts on international commerce and investment flows.