July 25 (Bloomberg) -- The Bank of Italy urged Banca Popolare di Milano Scrl, Italy’s oldest cooperative bank, to review its governance, two people familiar with the matter said.
The central bank gave Popolare di Milano a partially unfavorable result during an inspection, said one of the people, who asked to not be identified because the matter isn’t public. The Bank of Italy asked managers to resume talks to introduce more balanced governance, the people said.
Popolare di Milano rose as much as 3.8 percent in Milan trading after Italian news agency Radiocor reported the decision, which fueled speculation the bank may resume a plan to convert into a joint-stock company. Chief Executive Officer Piero Montani abandoned a plan in May to bring in proportional shareholder voting and transform the bank into an “SpA” after opposition from unions and employees.
“BPM is and must remain a cooperative bank,” said Massimo Masi, general secretary of the UILCA labor union, in a statement today. “We are available to review eventual governance changes that will not favor funds too much,” he said. A Bank of Italy official declined to comment. A spokesman for Popolare di Milano didn’t respond to calls and e-mail requests for comment.
The bank was 2.5 percent higher at 39.4 cents by 5:01 p.m. in Milan, paring this year’s decline to 13 percent and valuing the company at 1.3 billion euros ($1.7 billion).
The Bank of Italy also started a procedure to sanction supervisory board members for interfering in management board decisions, according to one of the people.
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