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COMMITTEE AGAINST EXPANSION OF AMPUGNANO AIRPORT – SIENA

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The ethical strategies of the bank Monte dei Paschi di Siena

 

            Monte dei Paschi di Siena (MPS) recently acquired 19% of the social

capital of Aeroporto di Siena S.p.a. from Aeroporto di Firenze S.p.a.: about

641,000 shares worth approximately €700,000.  The Florentine airport company now

holds 1.9% of the capital of the Siena airport company, while MPS's share rises

to 42.8%.

            This news confirms the increasing direct interest of MPS in the

operation of expanding the airport at Ampugnano, near Siena.  Although

the monetary investment is marginal, it raises questions about the role

of MPS in the operation and implications about its relationships with

stakeholders.

            The local community recognises the economic, social and cultural value 

that MPS has historically had.  The bank has generally promoted a communion of

interests between the bank and the population, regarding specific aspects of

Siennese life and land.  The new project breaks this communion of intents,

raising legitimate doubts about the industrial strategies adopted by the bank

and trepidation about the economic consequences that a loss of repute could

cause.

            In the industrial context, the decision of MPS diverges from the intention

of reducing capital allocation for shareholdings, declared in its industrial

plan for the period 2006-2009.  After relinquishing strategically important

shareholdings, such as Monte Paschi Vita and Asset Management, motivated by

considerations of market position and concentration of core business, it is

difficult to understand the economic sense of outlaying about €700,000 for a

holding in an airport that has always existed at a loss. The initiative is even

more questionable since MPS acquired Banca Antonveneta for 9 billion euro and is

in urgent need of funding the operation. The only reason could be to concentrate

control of Aeroporto di Siena S.p.a. in Siennese hands, avoiding strategic

action from Florence.  In any case, assessment of the economic merits of the

operation is the task of shareholders, who risk finding themselves involved in

an unprofitable operation.

            In terms of reputation, the implications are just as negative because they

could affect the image of MPS.  The reputation of a bank or any other enterprise

is linked to the important concept of social responsibility[1],  often a vague term

exploited solely for marketing.  MPS recently invested in ethical principles and

social responsibility, among other reasons to recover a loss of repute

occasioned by the unfortunate circumstances of the take-over of Banca 121 and

the sale of products that became a financial nightmare for many clients.  MPS

was one of the first Italian banks to publish a much esteemed social balance

sheet and to create a web site on the topic

(www.mps.it/I+nostri+Valori/).  Material on the site shows that MPS pays

much attention to the "charter of values", to which "the MPS group is committed"

and on which it "bases its reputation"[2] . 

It is not clear how the promotion of airport expansion, the heavy

environmental consequences of which are well known, can be in line with these

ethical principles and values.  If the project goes ahead, it will not only be

detrimental to the local community but will also have negative implications for

relationships with:

i)          socially orientated foreign and national investors[3] 

ii)         financial analysts specialised in ethical rating [4]

both particularly sensitive to environmental questions.  Involvement of MPS in

the airport operation could raise doubts about the bank's continued inclusion in

the international ethical club.  The reputational and economic consequences

would be enormous.