Luigi Lovaglio, reinstated chief executive of MPS, is weighing a sale of the bank’s €7.4bn 13% stake in insurer Generali. Proceeds would fund a long‑sought merger with Banco BPM, reviving Rome’s plan for a national banking champion. The Generali holding, originally owned by Mediobanca and bought last year, is viewed as a strategic asset linked to Italy’s sovereign debt.

Investors remain divided on liquidating the Generali block, but most back the MPS‑Banco BPM tie‑up. The government, which abstained from the board vote that restored Lovaglio, insists the insurer ends up in “safe hands” given its role in funding Italian bonds. Potential buyers such as Intesa Sanpaolo or UniCredit face antitrust concerns, while a special dividend to shareholders is also on the table.

The sale would give MPS additional firepower to offer a premium to Banco BPM shareholders and could pave the way for delisting Mediobanca. With the board’s first meeting proving “difficult,” any move on the Generali stake will likely wait for a clearer consensus. For now, Lovaglio’s strategy hinges on turning the Generali asset into merger financing.