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95-454: Banca Monte dei Paschi di Siena S.p.A. ( Italian pronunciation: [ˈbaŋka ˈmonte dei ˈpaski di ˈsjɛːna] ), known as BMPS or just MPS , is an Italian bank . Tracing its history to a mount of piety founded in 1472 (552 years ago) and established in its present form in 1624 (400 years ago), it is the world's oldest or second oldest bank , depending on the definition, and the fifth largest Italian commercial and retail bank. In 1995,

190-593: A 5.748 percent stake in the bank (as the bank was still a constituent of stock market indices at that time, such as the FTSE MIB , fund managers held stakes in their index tracking funds, and were required to disclose stakes of 5% or higher). In July, the capital increase was completed, of which the banking foundation had just owned 2.500% shares. In October, the bank failed the ECB's stress test of major European banks, (first Comprehensive Assessment of European Banking Supervision ) and

285-590: A Significant Institution since the entry into force of European Banking Supervision in late 2014, and as a consequence is directly supervised by the European Central Bank . Banca Monte dei Paschi di Siena traces its history to a mount of piety ( monte di pietà ) founded by order of the Magistrature of the Republic of Siena on 4 March 1472, when its statute was approved. It is therefore often regarded as being

380-412: A bank account is considered indispensable by most businesses and individuals. Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account. Banks issue new money when they make loans. In contemporary banking systems, regulators set a minimum level of reserve funds that banks must hold against the deposit liabilities created by

475-608: A greater ownership stake in return for more capital. In December 2012, Cassa di Risparmio di Biella e Vercelli was sold to Cassa di Risparmio di Asti for about €205.5 million. In 2009, the Santorini and Alessandria operations began creating huge losses. In order to hide them in the bank's financial statements, the top management, including Giuseppe Mussari, the bank president, chose to enter into derivative contracts with Deutsche Bank and Nomura . This arrangement eventually led to prison sentences for 13 bank executives. Estimates of

570-468: A joint venture insurance company of Unipol and Banca Agricola Mantovana , was acquired by AXA from Unipol via Banca MPS, Banca Agricola Mantovana was also absorbed into Banca MPS. Banca MPS also acquired regional bank Cassa di Risparmio di Biella e Vercelli from Intesa Sanpaolo in December 2007 for about €399 million. In the wake of rising yields and declining valuations on Italian government debt in

665-425: A large number of small to medium-sized institutions in its banking system. As of November 2009, China's top four banks have in excess of 67,000 branches ( ICBC :18000+, BOC :12000+, CCB :13000+, ABC :24000+) with an additional 140 smaller banks with an undetermined number of branches. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000 branches – more than double

760-571: A lower price than traditional private banking. These are called premium banking or priority banking services. They are meant for mass-affluent customers. The accounts do not generate as much revenue as traditional private banking, but given the number of customers, can provide sizeable revenue to the bank. In 2016, Credit Suisse and UBS replaced the phrase "private banking" with "wealth management"; private banking has faced reputational risk as an area for tax avoidance or even tax evasion . Private banking services are only accessible to customers with

855-475: A minimum amount of investible assets. For instance, in 2016, J.P. Morgan began requiring a minimum of $ 10 million in assets to qualify for private banking, with those with less being moved into their Private Client Direct program. Nevertheless, this seems to be an exception as a majority of banks establish the minimum threshold between $ 500,000 and $ 1 million. Indeed, private banking customers are frequently segmented according to their wealth. HNW are customers with

950-476: A net book value of €10.2 billion as at 31 March 2016. The junior tranche would be allocated to the shareholders of the bank (for a proposed €1.6 billion); the mezzanine tranche would be sold to Atlante for €1.6 billion (revised to purchase junior mezzanine tranche for €1.526 billion in December 2016); the senior tranches would be sold to the market with some of them being eligible to state guarantee (Garanzia sulla Cartolarizzazione delle Sofferenze) for €6 billion. It

1045-510: A plea bargain in 2016. Following an appeal, in May 2022, a Milan appeals court ruling overturned the 2019 conviction of the former executives and the two banks over derivative deals and cancelled the seizures imposed on Deutsche Bank and Nomura Holdings Inc. In October 2023, Italy's Supreme Court of Cassation confirmed the acquittals in Monte dei Paschi derivatives case. In March 2014, BlackRock declared

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1140-608: A possible recapitalisation of UniCredit , BMPS, Banca Popolare di Vicenza , Veneto Banca and Banca Carige , as well as banks that need recapitalisation in the near future. It was reported that the subordinate bond would be mandatorily converted to shares by the resolution authority of Italy (which is Bank of Italy) as a "bail-in". However, the bank had requested a Tier 2 subordinate capital instrument "Fresh 2008" excluded from such bail-in, as many investors were retail investors. On 25 January 2017 BMPS issued bonds with €7 billion face value. The bonds would mature from 1 to 3 years, with

1235-421: A renewal of their partnership bancassurance —an agreement intended to prevail until 2027. In December 2016, BMPS successfully made debt-to-equity swap for part of their subordinated debt and Tier 1 capital instrument, for a maximum price of €24.9 per new share (on top of €5 billion new shares issue). In mid-December, BMPS reopened the offer for the swap, which reached approx. €2.451 billion. However, due to

1330-416: A safe and convenient form of money backed by the goldsmith's promise to pay, allowing goldsmiths to advance loans with little risk of default . Thus the goldsmiths of London became the forerunners of banking by creating new money based on credit. The Bank of England originated the permanent issue of banknotes in 1695. The Royal Bank of Scotland established the first overdraft facility in 1728. By

1425-608: A total worth between €500,000 and €5 million; very high net worth individuals (VHNWI), with assets ranging between €5 million and €30 million; and ultra high net worth individuals (UHNWI), with wealth in excess of €30 million. In terms of AUM, the world's 10 largest private banks (or private banking divisions/subsidiaries of large bank holding companies ), as of 2019, are: Results from Euromoney's annual private banking and wealth management ranking in 2019, which consider, amongst other factors, assets under management (AUM), net income and net new assets. UBS Global Wealth Management took

1520-399: A variety of different ways including interest, transaction fees and financial advice. Traditionally, the most significant method is via charging interest on the capital it lends out to customers. The bank profits from the difference between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference

1615-446: Is a bank regulation , which sets a framework within which a bank or depository institution must manage its balance sheet . The categorisation of assets and capital is highly standardised so that it can be risk weighted . After the financial crisis of 2007–2008 , regulators force banks to issue Contingent convertible bonds (CoCos). These are hybrid capital securities that absorb losses in accordance with their contractual terms when

1710-400: Is a Bills of Exchange Act that codifies the law in relation to negotiable instruments , including cheques, and this Act contains a statutory definition of the term banker : banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that

1805-870: Is a criminal offence in Switzerland, tax evasion is only a civil offence , not requiring banks to notify taxing authorities. In Switzerland, there are many banks providing private banking services. Switzerland has remained neutral since the Congress of Vienna in 1815, including through two World Wars. After World War I, the former nobles of Austro-Hungarian Empire moved their assets to Switzerland for fear of confiscation by new governments. During World War II, many wealthy people, including Jewish families and institutions, moved their assets into Switzerland to protect them from Nazi Germany. However, this transfer of wealth into Switzerland had mixed and controversial results, as beneficiaries had difficulties retrieving their assets after

1900-403: Is a list of the largest deals in history in terms of value with participation from at least one bank: Currently, commercial banks are regulated in most jurisdictions by government entities and require a special bank license to operate. Usually, the definition of the business of banking for the purposes of regulation is extended to include acceptance of deposits, even if they are not repayable to

1995-431: Is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle . Fees and financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on these revenue lines to smooth their financial performance. In

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2090-442: Is unbiased. They believe there is no incentive to push proprietary products, and the client gets the best of what they offer. A few banks claim to have a "strong advisory team" that reflects in the products they offer the client. A couple of banks also define their value proposition on their unified platform, their ability to comply with all regulations, yet serve the client without restrictions. Open architecture product platform

2185-445: Is where a private bank distributes all the third party products and is not restricted to selling only its proprietary products. Closed architecture product platform is where the bank sells only its proprietary products and does not entertain any third party product. These days the needs of the clients are so diverse that it is practically impossible for a bank to cater to those needs by its proprietary products alone. Clients today demand

2280-605: The Basel Accords . Banking in its modern sense evolved in the fourteenth century in the prosperous cities of Renaissance Italy but, in many ways, functioned as a continuation of ideas and concepts of credit and lending that had their roots in the ancient world . In the history of banking , a number of banking dynasties  – notably, the Medicis , the Pazzi , the Fuggers ,

2375-714: The Dutch royal family are managed by MeesPierson (founded in 1720). The assets of the British Royal Family are managed by Coutts (founded in 1692). Historically, private banking has been viewed as a niche that only caters to HNWIs—specifically those with liquidity over $ 2 million, though it is now possible to open private banking accounts with as little as $ 250,000 for private investors. An institution's private banking division provides services such as wealth management, savings, inheritance, and tax planning for their clients. For private banking services, clients pay either based on

2470-518: The European sovereign-debt crisis , MPS lost over $ 2 billion in the first half of 2012, had to recapitalize, and faced restructuring or worse. The majority owner until the recapitalization, the Fondazione Monte dei Paschi di Siena, long resisted issuing new capital which would dilute its holding. In September 2012, even after the dilution, the bank "appear[ed] poised" also to give the national government

2565-705: The Federal Deposit Insurance Corporation (FDIC) as a regulator. However, for soundness examinations (i.e., whether a bank is operating in a sound manner), the Federal Reserve is the primary federal regulator for Fed-member state banks; the Office of the Comptroller of the Currency (OCC) is the primary federal regulator for national banks. State non-member banks are examined by the state agencies as well as

2660-631: The Great Depression , the U.S. Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and the sub-prime mortgage crisis in the 2000s. The 2023 global banking crisis is the latest of these crises: In March 2023, liquidity shortages and bank insolvencies led to three bank failures in the United States , and within two weeks, several of the world's largest banks failed or were shut down by regulators Assets of

2755-522: The Medici Bank , in 1397. The Republic of Genoa founded the earliest-known state deposit bank, and Banco di San Giorgio (Bank of St. George), in 1407 at Genoa , Italy. Fractional reserve banking and the issue of banknotes emerged in the 17th and 18th centuries. Merchants started to store their gold with the goldsmiths of London , who possessed private vaults , and who charged a fee for that service. In exchange for each deposit of precious metal,

2850-563: The Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths. The definition of a bank varies from country to country. See the relevant country pages for more information. Under English common law , a banker is defined as a person who carries on the business of banking by conducting current accounts for their customers, paying cheques drawn on them and also collecting cheques for their customers. In most common law jurisdictions there

2945-577: The Welsers , the Berenbergs , and the Rothschilds  – have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant bank is Berenberg Bank (founded in 1590). Banking as an archaic activity (or quasi-banking ) is thought to have begun as early as the end of the 4th millennium BCE, to

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3040-563: The oldest bank in the world in continuous operation. The basis of its foundation is the Statuto dei Paschi , written in 1419, a law that regulated all activities related to agriculture and pastoralism in Maremma . Its current form dates from 1624, when Siena was incorporated into the Grand Duchy of Tuscany and Grand Duke Ferdinando II granted to depositors of Monte, in their warranty, the income of

3135-570: The "parent brand" to gain a client’s trust and confidence. These banks have a strong presence across the globe and present private bank offerings as a part of the parent group. "One Bank approach" is where private banks offer an integrated proposition to meet clients personal and business needs. Since private banking concerns understanding a client’s need and risk appetite, and tailoring the solution accordingly, few banks define their value proposition along this dimension. Most modern private banks follow an open product platform, and hence claim their advice

3230-474: The 15,000 branches in the United Kingdom. Between 1985 and 2018 banks engaged in around 28,798 mergers or acquisitions, either as the acquirer or the target company. The overall known value of these deals cumulates to around 5,169 bil. USD. In terms of value, there have been two major waves (1999 and 2007) which both peaked at around 460 bil. USD followed by a steep decline (−82% from 2007 until 2018). Here

3325-466: The 17th century, in parallel with the development of sophisticated agriculture, managing the assets of the royal family, nobility and the landed gentry. The United States has one of the largest private banking systems in the world, in part due to the 3.1 million HNWIs accounting for 28.6% of the global HNWIs population in 2010, according to the co-research of Capgemini and Merrill Lynch . Some American banks that specialize in private banking date back to

3420-492: The 19th century, such as U.S. Trust (founded in 1853) and Northern Trust (founded in 1889). Internationalisation of the economy, technological developments such as the internet and mobile phones ensure that banks have to innovate and look for new markets . For example, the growth of HNWIs is low in traditional private banking markets such as Europe, compared with Asia where the number of millionaires has grown to 3.6 million. Banks also provide some private banking services at

3515-404: The 19th century, we find in ordinary cases of deposits, of money with banking corporations, or bankers, the transaction amounts to a mere loan, or mutuum , and the bank is to restore, not the same money, but an equivalent sum, whenever it is demanded and money, when paid into a bank, ceases altogether to be the money of the principal (see Parker v. Marchant, 1 Phillips 360); it is then the money of

3610-419: The 3rd millennia BCE. The present era of banking can be traced to medieval and early Renaissance Italy, to the rich cities in the centre and north like Florence , Lucca , Siena , Venice and Genoa . The Bardi and Peruzzi families dominated banking in 14th-century Florence, establishing branches in many other parts of Europe. Giovanni di Bicci de' Medici set up one of the most famous Italian banks,

3705-534: The Banca d'Italia (Bank of Italy) approved a bailout request from the bank for €3.9 billion ($ 5.3 billion). The firm sparked fresh controversy in 2013 when it was accused of misleading Italy's market regulator in October 2012, shortly before it received a 4.1-billion euro ($ 5.47 billion) state bailout. On 29 December 2013, Fondazione Monte dei Paschi di Siena rejected plans for issuing €3 billion worth of new shares, delaying

3800-522: The FDIC. National banks have one primary regulator – the OCC. Each regulatory agency has its own set of rules and regulations to which banks and thrifts must adhere. The Federal Financial Institutions Examination Council (FFIEC) was established in 1979 as a formal inter-agency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions. Although

3895-488: The FFIEC has resulted in a greater degree of regulatory consistency between the agencies, the rules and regulations are constantly changing. Private banking Banking originated in provision of some services of what is now seen as "private" banking. Early Venetian banks provided personal finance for wealthy families. Private banks came to be known as "private" to stand out from the retail banking and savings banks aimed at

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3990-749: The Italian average itself was higher than the European Union average. On 21 January 2016 MPS securitized €1.6 billion performing lease receivables portfolio for a value of €1.4173 billion. The bank repurchased €656 million of the securities (tranches B to D) and sold €761.3 million of the securities to the market (tranche A). In April 2016 German Bundesbank board member Andreas Dombret commented that many Greek and Italian banks were zombie banks that were kept for political reasons. He urged that European Central Bank should deal with banks with high level of non-performing loans. However, he did not state specifically if BMPS

4085-469: The Italian government sold a further 12.5% stake in MPS, for about €650 million. This sell further cuts Italy's stake in MPS, reducing it to 26.7% from 39.2%, and advances the government's plan to privatise MPS. Bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans . Lending activities can be directly performed by

4180-567: The UK, for example, the Financial Services Authority licenses banks, and some commercial banks (such as the Bank of Scotland ) issue their own banknotes in addition to those issued by the Bank of England , the UK government's central bank. Banking law is based on a contractual analysis of the relationship between the bank (defined above) and the customer  – defined as any entity for which

4275-421: The adverse scenario in 2018, it would mean the bank would have a capital shortfall of €8.8 billion (core tier 1, additional tier 1 and tier 2 capitals combined), according to European Central Bank publication on 29 December 2016. On the same day, the plan to recapitalize the bank for €5 billion was announced; the bank also planned to securitize the entire bad loan portfolio for a target of €9.2 billion, which had

4370-518: The approval of general shareholders' meeting. The bank 2016 revenue, net interest income and pre-provision profit were decreased, compared to 2015. Combined with the write-down and provisions for NPLs, the net loss of the year was €3.380 billion. The CET1 ratio was reaching the legal minimal threshold of 8.0% (below ECB requirement in individual basis on the bank for 10.75%) On 1 June 2017 European Commissioner Margrethe Vestager agreed in-principle for

4465-454: The bank (then known as Monte dei Paschi di Siena) was transformed from a statutory corporation to a limited company called Banca Monte dei Paschi di Siena (Banca MPS). The Fondazione Monte dei Paschi di Siena was created to continue the charitable functions of the bank and to be, until the bailout in 2013, its largest single shareholder. According to research by Mediobanca and a press release issued by Banco BPM , Banco BPM overtook BMPS as

4560-639: The bank agrees to conduct an account. The law implies rights and obligations into this relationship as follows: These implied contractual terms may be modified by express agreement between the customer and the bank. The statutes and regulations in force within a particular jurisdiction may also modify the above terms or create new rights, obligations, or limitations relevant to the bank-customer relationship. Some types of financial institutions, such as building societies and credit unions , may be partly or wholly exempt from bank license requirements, and therefore regulated under separate rules. The requirements for

4655-571: The bank or indirectly through capital markets . Whereas banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional-reserve banking , under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity , banks are generally subject to minimum capital requirements based on an international set of capital standards,

4750-404: The bank was 12%, mainly due to another capital increase during the year, which the European Central Bank required Banca MPS to have a minimum of 10.75% from 31 December 2016 onward, or 10.2% in the transitional period. Moreover, both the gross (34%) and net non-performing loan to total loan ratio (22%) were still higher than the Italian average (18.1% in gross and 10.8% in net at December 2015) and

4845-411: The bank will not repay it), and interest rate risk (the possibility that the bank will become unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loans). Banking crises have developed many times throughout history when one or more risks have emerged for the banking sector as a whole. Prominent examples include the bank run that occurred during

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4940-667: The bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer , EFTPOS , and automated teller machines (ATMs). Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits , and by issuing debt securities such as banknotes and bonds . Banks lend money by making advances to customers on current accounts, by making installment loans , and by investing in marketable debt securities and other forms of money lending. Banks provide different payment services, and

5035-456: The banker, who is bound to return an equivalent, by paying a similar sum to that deposited with him, when he is asked for it. The goldsmith paid interest on deposits. Since the promissory notes were payable on demand, and the advances (loans) to the goldsmith's customers were repayable over a longer time-period, this was an early form of fractional reserve banking . The promissory notes developed into an assignable instrument which could circulate as

5130-704: The beginning of the 19th century Lubbock's Bank had established a bankers' clearing house in London to allow multiple banks to clear transactions. The Rothschilds pioneered international finance on a large scale, financing the purchase of shares in the Suez canal for the British government in 1875. The word bank was taken into Middle English from Middle French banque , from Old Italian banco , meaning "table", from Old High German banc, bank "bench, counter". Benches were used as makeshift desks or exchange counters during

5225-447: The best of breed products and most banks have to follow an open architecture product platform where they distribute products of other banks to their clients in return for commission. Products offered to private banking clients include equities, fixed-income securities, structured products, foreign exchange, commodities, deposits and real-estate investments. Different banks charge their clients in different ways. There are banks that follow

5320-447: The bond of the bank to shares. On 29 July, the bank announced that the issue price of the new shares to the government was €6.49, with €8.65 for debt-to-equity shares. Stefania Bariatti replaced her predecessor as chairperson of MPS during December 2017. On 5 October 2018, BMPS announced the sale of its Belgian subsidiary, Banca Monte Paschi Belgio (BMPB), to a company participated in by funds managed by Warburg Pincus . The sale price

5415-515: The business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purpose of regulating and supervising banks rather than regulating the actual business of banking. However, in many cases, the statutory definition closely mirrors the common law one. Examples of statutory definitions: Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking ,

5510-533: The capital increase to be vaporized. The Tier 1 capital ratio of the bank was 8.7% as at 31 December 2014. On 6 July 2015, following the Greek bailout referendum , trading in Monte dei Paschi shares was suspended after they fell 5.7%. Eventually Banca MPS achieved a net profit of €388 million in 2015. but mainly due to the effect of the restatement as a CDS derivative of the Alexandria transaction. The CET1 capital ratio of

5605-533: The capital of the issuing bank falls below a certain level. Then debt is reduced and bank capitalisation gets a boost. Owing to their capacity to absorb losses, CoCos have the potential to satisfy regulatory capital requirement. The economic functions of banks include: Banks are susceptible to many forms of risk which have triggered occasional systemic crises. These include liquidity risk (where many depositors may request withdrawals in excess of available funds), credit risk (the chance that those who owe money to

5700-483: The cheque has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques . Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers in

5795-423: The cross-selling of complementary products. Banks face a number of risks in order to conduct their business, and how well these risks are managed and understood is a key driver behind profitability, and how much capital a bank is required to hold. Bank capital consists principally of equity , retained earnings and subordinated debt . Some of the main risks faced by banks include: The capital requirement

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5890-408: The customer's order – although money lending, by itself, is generally not included in the definition. Unlike most other regulated industries, the regulator is typically also a participant in the market, being either publicly or privately governed central bank . Central banks also typically have a monopoly on the business of issuing banknotes . However, in some countries, this is not the case. In

5985-511: The failed recapitalisation, BMPS requested a precautionary recapitalisation by the Italian Government in order to bail out the bank by excising Article 32(4) of EU Bank Recovery and Resolution Directive (The EU-wide banking resolution law, which restricted state aid to a mean of last resort). On 20 December the Italian Government had already raised €20 billion to set up a save-savings ( Italian : salva-risparmio ) fund in order to subscribe

6080-463: The failure to issue €5 billion new shares, the swap offer and disposal of NPLs were voided. Although J.P. Morgan, Mediobanca, Banco Santander, Bank of America Merrill Lynch, Citigroup, Credit Suisse, Deutsche Bank and Goldman Sachs had signed a pre-underwriting agreement with BMPS in July. No banks and no anchor investor entered into contracts with BMPS. At 01:20am, on 23 December 2016, the midnight after

6175-533: The fields of education, science, health and art, especially with reference to the city and the province of Siena. On 25 June 1999, Banca Monte dei Paschi di Siena was listed successfully on the Italian Stock Exchange . After its debut on the Italian Stock Exchange , the bank began an intense phase of commercial and operational expansion. The bank acquired some regional banks: Banca Agricola Mantovana and Banca del Salento , while subsidiary Banca Toscana

6270-589: The funding of these loans, in order to ensure that the banks can meet demands for payment of such deposits. These reserves can be acquired through the acceptance of new deposits, sale of other assets, or borrowing from other banks including the central bank. Activities undertaken by banks include personal banking , corporate banking , investment banking , private banking , transaction banking , insurance , consumer finance , trade finance and other related. Banks offer many different channels to access their banking and other services: A bank can generate revenue in

6365-407: The goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee ; these receipts could not be assigned, only the original depositor could collect the stored goods. Gradually the goldsmiths began to lend money out on behalf of the depositor , and promissory notes , which evolved into banknotes, were issued for money deposited as a loan to the goldsmith. Thus, by

6460-442: The issue of a bank license vary between jurisdictions but typically include: Banks' activities can be divided into: Most banks are profit-making, private enterprises. However, some are owned by the government, or are non-profit organisations . The United States banking industry is one of the most heavily regulated and guarded in the world, with multiple specialised and focused regulators. All banks with FDIC-insured deposits have

6555-409: The largest 1,000 banks in the world grew by 6.8% in the 2008–2009 financial year to a record US$ 96.4 trillion while profits declined by 85% to US$ 115 billion. Growth in assets in adverse market conditions was largely a result of recapitalisation. EU banks held the largest share of the total, 56% in 2008–2009, down from 61% in the previous year. Asian banks' share increased from 12% to 14% during

6650-610: The late 19th century. MPS was also involved in the bail-out of Cassa di Risparmio di Prato , becoming the major shareholder. In 1995, a decree of the Ministry of the Treasury of the Italian Republic dated 8 August 1995, gave rise to two institutions: Banca Monte dei Paschi di Siena S.p.A. and Fondazione Monte dei Paschi di Siena , a non-profit organization with the statutory purpose of providing assistance, charity and social utility in

6745-450: The legal basis for bank transactions such as cheques does not depend on how the bank is structured or regulated. The business of banking is in many common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business . When looking at these definitions it is important to keep in mind that they are defining

6840-670: The level of assistance and consultancy to investors and businesses, and updated its activities in private banking and in private pension plans . At the conclusion of this plan of expansion, the bank implemented a vast program of opening new branches of the Group, with more than 2,000 branches. In order to finance this expansion model, the bank entered into some derivatives that were hidden: operations Santorini in 2002 and Alexandria in 2006. On 8 November 2007, Monte dei Paschi di Siena announced that it had reached an agreement with Banco Santander to buy Banca Antonveneta for €9 billion excluding

6935-531: The losses accumulated by the Santorini and Alessandria operations in the period leading up to the derivative contracts range from €500 to €750 million. The documentation concerning these operations was never communicated to the bank's own auditors or the Banca d'Italia . The derivative contracts and related documentation were discovered and made public by the new board of the bank at the end of November 2012. The documentation

7030-732: The new middle class . Traditionally, private banks were linked to families for several generations. They often advised and performed all financial and banking services for these families. Historically, private banking has developed in Europe (see the List of private banks ). Some banks in Europe are known for managing the assets of some royal families. The assets of the Princely Family of Liechtenstein are managed by LGT Group (founded in 1920 and originally known as The Liechtenstein Global Trust). The assets of

7125-447: The number of transactions, the annual portfolio performance or a "flat-fee", usually calculated as a yearly percentage of the total investment amount. "Private" can also allude to bank secrecy and minimizing taxes through careful allocation of assets, or by hiding assets from the taxing authorities. Swiss and certain offshore banks have been criticized for such cooperation with individuals practising tax evasion. Although tax fraud

7220-455: The past 20 years, American banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market conditions. This helps in making a profit and facilitates economic development as a whole. Recently, as banks have been faced with pressure from fintechs, new and additional business models have been suggested such as freemium, monetisation of data, white-labeling of banking and payment applications, or

7315-639: The raising of capital until at least May 2014 and increasing the risk of nationalization. In November 2019, after a three-year trial, 13 former bank executives received prison sentences. The Monte dei Paschi ex-chairman and CEO received seven years each; two senior executives five and four years. Three bankers from Deutsche Bank received five years and two from Nomura received five and three years. The court decided that they had conspired to hide Monte dei Pasche's losses of €2bn between 2008 and 2012 by using complicated derivative contracts. Deutsche Bank and Nomura were fined €160m; Monte dei Paschi had paid €10.6m after

7410-537: The replacement of the previous Tremonti bonds. The delegation of the extraordinary powers to the Board of Directors has also included the possibility of increasing the share capital of €2 billion at the exclusive service of the payment of interest payable in shares. The shareholders approved with a 98% vote in favour. After the vote, the bank recovered 11.36% on the stock exchange after having lost more than 20% of its value in three sessions in three days. On 26 January 2013

7505-451: The state aid of the bank. On 5 July, the industrial plan of the bank was approved, which the bank would be re-capitalized for €8.1 billion, but only €3.9 billion would be underwritten by the Ministry of Economy and Finance (excluding additional shares that would be buyback from retail bondholders by the government), with the rest were the "bail-in" of bondholders, mandatorily converted

7600-482: The state guarantee from the aforementioned government fund. The bank said the bond would be sold to the market or used as a collateral in borrowing process. On 3 February 2017 BMPS sold its card business to Istituto Centrale delle Banche Popolari Italiane (ICBPI) for €520 million. Other leading banks of Italy, such as Intesa Sanpaolo and UniCredit had already sold their division in 2016. On 9 February 2017 BMPS announced their 2016 financial results subject to

7695-498: The state-owned pastures of Maremma (the so-called "Paschi" which gave the bank its name). The bank consolidated and increased its banking activity during the 17th and 18th centuries. With the unification of Italy , the bank expanded its business throughout the Italian peninsula , initiating new activities, including mortgage loans , the first experience in Italy. It was still state-owned by

7790-481: The stock exchange that day, and another 8% the next day. On 25 January 2013, an extraordinary general meeting of the shareholders of the bank was convened. They resolved to grant the Board of Directors the power to increase the share capital by a maximum amount of €4.5 billion to service the exercise of conversion rights of the bank of the Monti bonds. MPS called for an intervention of €3.9 billion, including €1.9 billion for

7885-663: The subsidiary Interbanca that is owned by the Spanish bank. Antonveneta is the bank that after the Bancopoli scandal was acquired by ABN AMRO and was supposed to go to Banco Santander after the purchase of the Dutch bank by the consortium of RBS , Santander , Fortis . From February 2007 to June 2008 Banca MPS sold all the shares (27.839%) in Finsoe , an intermediate holding company of Unipol Group, for €584.8 million. In 2008, Quadrifoglio Vita ,

7980-526: The third largest commercial banking group in Italy (in terms of total assets) on 31 December 2016, after Banco BPM's formal formation on 1 January 2017. In 2016–17, BMPS was struggling to avoid a collapse, and it was bailed out again by the Italian government in July 2017. In 2020, BMPS had approximately 1,400 branches, 21,000 employees and 3.9 million customers in Italy, as well as branches and businesses abroad. A subsidiary, MPS Capital Services , handles corporate and investment banking. It has been designated as

8075-589: The top spot in Euromoney's 2019 survey for "Best private banking services overall 2019". This table displays results of one category of the private banking ranking, "Best global private banking services overall 2019". Most private banks define their value proposition along one or two dimensions, and meet the basic needs across others. Some of the dimensions of value proposition of a private bank are parent brand, one-bank approach, unbiased advice, strong research and advisory team and unified platform. Many banks leverage

8170-401: The transactional model where the client is not charged any advisory fee at all. The banks thrive totally on the commissions they get by distributing third party products. There are other private banks that follow a hybrid model. In this model, the bank charges a fixed fee for certain products and advisory fee for the rest. Some of the other banks are totally advisory driven and charge the clients

8265-477: The war. After World War II, in eastern Europe, assets were again moved into Switzerland for fear of confiscation by communist governments. Today, Switzerland remains the largest offshore center, with about 27% ($ 2.0 trillion) of global offshore wealth in 2009, according to Boston Consulting Group . Offshore wealth is defined as assets booked in a country where the investor has no legal residence or tax domicile. In Great Britain , private banks were established in

8360-459: The year, while the share of US banks increased from 11% to 13%. Fee revenue generated by global investment in banking totalled US$ 66.3 billion in 2009, up 12% on the previous year. The United States has the most banks in the world in terms of institutions (5,330 as of 2015) and possibly branches (81,607 as of 2015). This is an indicator of the geography and regulatory structure of the US, resulting in

8455-453: Was absorbed. In 2003, the controlling interests (79%) of Cassa di Risparmio di Prato was sold to Banca Popolare di Vicenza in March 2003 for €411.2 million. The bank had also started a process to reinforce the structures of production in strategic market segments through the development of product companies: At the same time, the bank upgraded its commercial productivity, with the aim of improving

8550-563: Was expected to reduce the gross NPLs ratio to 17.8%, on par with Italian average but still higher than many European peers. In December 2016, the disposal plan was modified: a senior mezzanine tranche (for €1.171 billion) was added—to be underwritten by the bank itself. In September 2016, CEO Fabrizio Viola and chairman Massimo Tononi resigned. They were replaced by Marco Morelli and Alessandro Falciai , respectively. On 28 November 2016, every 100 BMPS shares were converted into one new BMPS share and, on 2 December 2016, AXA and BMPS announced

8645-423: Was given two weeks to prepare a plan to raise €2.11 billion in capital. Despite issuing €5 billion in shares just four months earlier, the ECB declared the bank unable to withstand a financial catastrophe. Shares proceeded to drop 22%. In November, 2014, the bank reported a loss of €1.1497 billion in the 3rd quarter of the year. Eventually in 2014 financial year, the bank had a net loss of €5.3429 billion, resulting in

8740-434: Was one of the zombie banks or not. On 23 June a gross value of €290 million bad loan portfolio was disposed of without recourse to Kruk Group. On 4 July the bank confirmed that a request of reducing non-performing loans from European Central Bank was received. In 2015 the bank had €46.9 billion NPLs in gross and €24.2 billion in net. The bank targeted to reduce the gross NPLs to total loans ratio to 20% in 2018. However, this

8835-527: Was set at €42 million, subject to an adjustment mechanism. Between 2018 and 2020 the bank made 49.8% of its pre-tax profits in tax havens . On 20 November 2023, the Italian government sold a 25% stake in MPS, thus partially privatising the bank and reducing the government's stake from 64% to 39%. After a €178mn loss in 2022, MPS returned to full-year profit with record earnings of just over €2bn for 2023. In February 2024, MPS paid its first dividend since 2010, returning €315mn to shareholders. On 27 March 2024,

8930-402: Was still higher than the Italian average at 31 December 2015. On 29 July 2016, 2016 European Union bank stress test was announced. Among the 51 banks in the test, BMPS was the only bank that CET1 ratio (in full Basel III basis) was forecast as negative in the adverse scenario in 2018. If setting CET1 Ratio and Total Capital Ratio (fully loaded basis) targets at 8% and 11.5% respectively even in

9025-441: Was then forwarded to the Banca d'Italia between December 2012 and mid-January 2013. The shareholders and the analysts have ascertained that the bank had not declared losses from derivatives. On 22 January 2013, the bank's shares lost 5.6% on the stock exchange and Mussari resigned as president of Associazione Bancaria Italiana . On 23 January 2013, the scandal of the hidden derivatives was revealed. The bank's shares dropped 8.43% on

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