Italy’s Finance Ministry is supporting Luigi Lovaglio for a second term as CEO of Banca Monte dei Paschi di Siena. The move, confirmed by people familiar with the matter, signals state confidence in his leadership of the historic lender, which has been under government stewardship since a 2017 bailout.

Lovaglio’s renewed mandate would provide continuity for the bank as it works to strengthen its balance sheet and navigate a challenging Italian banking sector. His tenure has overseen a gradual stabilization, but Paschi still faces pressure from non-performing loans and competition from larger rivals like UniCredit.

Investors will watch for the bank’s upcoming earnings and any formal announcement on Lovaglio’s reappointment. His continued leadership could influence Paschi’s strategic direction, including potential merger discussions or capital market moves, as the government seeks to eventually reduce its ownership stake.