Finance

Tuscany’s bailed-out Monte dei Paschi unexpectedly launched a 13-billion-euro all-share takeover proposal for Mediobanca.
Monte dei Paschi, which required state rescue in 2017 after years of battering losses, has long been the poster child of trouble in the Italian banking sector.
Monte dei Paschi’s investors include Mediobanca shareholders such as business tycoon Francesco Gaetano Caltagirone, a key ally of the administration of Giorgia Meloni, and Delfin — the holding company of late billionaire Leonardo del Vecchio.

The logo of a Mediobanca Premier bank branch in Brescia, Italy, on Friday, Jan. 24, 2025.
Bloomberg | Bloomberg | Getty Images

Shareholders of Italian lender Mediobanca on Tuesday rejected a 13-billion-euro takeover offer from smaller domestic peer Monte dei Paschi, amid a ramp-up in consolidation bids in the Italian banking sector.
 “The Offer is devoid of industrial and financial rationale and is therefore destructive for Mediobanca,” the lender said in a statement.

The company added that the proposal has no industrial value, compromises Mediobanca’s identity and business profile, as well as gains for shareholders of both the lender and Monte dei Paschi, “given the likelihood of a significant loss of customers in those business areas (such as Wealth Management and Investment Banking) which require professionals who are independent and of high standing and professionalism.”
CNBC has reached out to Monte dei Paschi for comment.
Monte dei Paschi shares were down 1.32% at 1:08 p.m. London time following the news, with Mediobanca shedding 2.7%.
The world’s oldest bank, the bailed-out Monte dei Paschi (MPS) unexpectedly launched an all-share takeover proposal for Mediobanca (MB) on Friday, offering 23 of its shares for 10 of those of its acquisition target and valuing Mediobanca’s stock at15.992 euros each — or a 5% premium to the close price of Jan. 23. Some analysts have questioned the synergies that might result from the two banks’ union, with a Barclays note on Jan. 27 flagging that “this complementarity, the value creation drivers and in general MPS strategy on MB are not yet clear.”
Tuscany’s Monte dei Paschi, which required state rescue in 2017 after years of battering losses, has long been the poster child of trouble in the Italian banking sector, before a brisk turnaround in its fortunes after the 2022 appointment of UniCredit veteran Luigi Lovaglio to helm the bank.

The Italian government has long sought to privatize the lender, but retains a 11.73% stake after diluting its position last year. Monte dei Paschi’s investors include Mediobanca shareholders such as business tycoon Francesco Gaetano Caltagirone and Delfin — the holding company of late billionaire Leonardo del Vecchio, which increased its MPS stake to 9.78% since January.
In its Tuesday statement, Mediobanca stressed the “significant cross-shareholdings of Delfin and Caltagirone” in the lender, Monte dei Paschi and Italian insurer Assicurazioni Generali, questioning whether this represents a “potential misalignment of interests relative to other shareholders” in the context of the takeover offer.
The Rome government of Giorgia Meloni has long attempted to find a partner for Monte dei Paschi, which was once courted as a potential acquisition target by UniCredit until talks dissolved in 2021. Last year, Italy’s third-largest lender Banco BPM purchased a 5% stake in Monte dei Paschi from the government. But UniCredit’s surprise $10.5 billion offer for Banco BPM in November has paralyzed any potential further moves on MPS, pushing Rome into a corner and pitting UniCredit CEO Andrea Orcel against Meloni.
Back in September, UniCredit also unexpectedly spread its wings with a stake build in German lender Commerzbank, raising questions over potential ambitions of cross-border consolidation.   More

Nvidia CEO Jensen Huang delivers a keynote address at the Consumer Electronics Show (CES) 2025, showcasing the company’s latest innovations in Las Vegas, Nevada, USA, on January 6, 2025. 
Artur Widak | Anadolu | Getty Images

Nvidia shares traded higher in the premarket Tuesday, as traders reassessed the implications of a much cheaper-to-build large-language model for the artificial intelligence trade.
The chipmaker’s rebound in the early session was shaky, with it up about 3%. The stock’s bounce was much bigger earlier in the morning and was reducing as the official market open neared.

The stock plunged 17% on Monday and slashed more than $595 billion from the company’s valuation, the biggest single-day market cap decline on record.

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Nvidia 1-day

Monday’s steep sell-off — which sent shockwaves across the broader tech industry, with Nasdaq Composite dropping 3% —  came as traders grew fearful that an AI stock bubble could burst due to the emergence of Chinese startup DeepSeek.
DeepSeek last week released an open-source model that reportedly outperformed OpenAI’s in different tests. The company also said the initial version of this model cost less than $6 million to build — a fraction of the billions of dollars major U.S. tech companies are spending on AI.
To be sure, Nvidia — which has been the posterchild of the U.S. AI trade due to its high-powered chips  — called DeepSeek’s R1 model “an excellent AI advancement.”
“DeepSeek’s work illustrates how new models can be created using that technique, leveraging widely-available models and compute that is fully export control compliant,” an Nvidia spokesperson told CNBC on Monday.

Additionally, most Wall Street analysts stood by Nvidia after the sell-off, with none of them downgrading the stock thus far. Some also see the DeepSeek developments as a long-term positive for AI.
“We think investors need to differentiate between the impacts around potential benefits and drawbacks of DeepSeek for the software industry. More powerful LLM models that can run at a fraction of the original cost estimates (if confirmed) will mean that genAI adoption should come easier … and hence, faster and broader across the software universe,” wrote Barclays analyst Raimo Lenschow.
To be sure, while Morgan Stanley’s Joseph Moore kept his overweight rating on the stock, he did trim his price target to $152 from $166 on Tuesday.
“The DeepSeek release highlights evolutionary innovations in AI, some of which may be deflationary. That said, the stock market reaction is probably more important than the cause, and could bring further export controls or reduce spending enthusiasm; trimming PTs but remain positive,” he said. More

The bank is preparing to wind down its M&A and equity capital markets businesses in Europe, the U.K. and the U.S.
“As part of our ongoing efforts to simplify HSBC and increase leadership in our areas of strength, we are finalising a review of our Investment Banking business,” a spokesperson said Tuesday.
The news comes as HSBC CEO Georges Elhedery, who stepped into the leadership role last year, embarks the lender on a broader overhaul targeting cost-cutting efforts.

Branch of HSBC bank on 15th January 2024 in London, United Kingdom. HSBC Bank plc is a British multinational banking and financial services organisation. HSBCs international network comprises around 7,500 offices in over 80 countries globally. (photo by Mike Kemp/In Pictures via Getty Images)
Mike Kemp | In Pictures | Getty Images

HSBC is preparing to wind down its M&A and equity capital markets businesses in Europe, the U.K. and the U.S. amid a broader overhaul of its investment banking operations.
“As part of our ongoing efforts to simplify HSBC and increase leadership in our areas of strength, we are finalising a review of our Investment Banking business,” a spokesperson said Tuesday. “We will retain more focused M&A and equity capital markets capabilities in Asia and the Middle East and will begin to wind-down our M&A and equity capital markets activities in the UK, Europe, and the US, subject to local legal requirements.”

Global investment banking brought in $544 million in the six months to June 30, accounting for just 6.2% of the bank’s net income over the period, according to HSBC’s interim report.
London-listed shares of HSBC were down 0.16% at 11:50 a.m. London time.
The news, first reported by Bloomberg, comes as HSBC CEO Georges Elhedery, who stepped into the leadership role last year, embarks the lender on a broader overhaul targeting cost-cutting efforts.
Back in October, the bank unveiled plans for a new geographic setup and set out to consolidate its operations into four business units, divided between an “Eastern markets” branch — reuniting Asia-Pacific and the Middle East — and a “Western markets” division, comprising the non-ringed-fenced U.K. bank, the continental European business and the Americas.
HSBC, which is due to post annual results on Feb. 19, has benefitted alongside other European lenders from a stretch of high interest rates, but must now brace for the loss as the European Central Bank continues to relax its monetary policy. The bank most recently reported pre-tax profit of $8.5 billion in the third quarter, coming ahead of analyst expectations near $8 billion, according to LSEG data. At the time, the lender also announced a $3-billion share buyback.
The bank has also been weathering change at the top, with its first female Chief Finance Officer Pam Kaur taking office this month and with long-serving chair Mark Tucker expected to step down in 2026, according to Sky News. More

Chinese AI startup DeepSeek sparked a rout in U.S. technology stocks as its highly competitive and potentially much cheaper models stoked doubts about the billions that the big U.S. tech companies are spending on AI.
DeepSeek’s emergence is shaking up investor confidence in the AI story that has been lifting the U.S. bull market the past two years.
Here’s how the DeepSeek-triggered market sell-off on Wall Street unfolded.

Dado Ruvic | Reuters

A young Chinese AI startup, DeepSeek, sparked a massive rout in U.S. technology stocks Monday as its highly competitive — and potentially shockingly cost-effective — models stoked doubts about the hundreds of billions of dollars that America’s biggest tech companies are spending on artificial intelligence.
DeepSeek’s emergence is shaking up investor confidence in the AI story that has been lifting the U.S. bull market the past two years. It calls into question the hype around Nvidia’s chips and rippled all the way through the market to hit shares of power producers who were set to get a boost from AI data center demand.

Here’s how the DeepSeek-triggered market sell-off on Wall Street unfolded:
New reasoning model
DeepSeek was founded in May 2023 by Liang Wenfeng, who partly funded the company by his AI-powered hedge fund. In late December, the AI developer launched a free, open-source large language model that it said took only two months to develop and less than $6 million to build.
On Jan. 20, the Hangzhou, China-based DeepSeek released R1, a reasoning model that outperformed Open AI’s latest o1 model in many third-party tests.
DeepSeek is looking to differentiate from its competitors with its reasoning capabilities, meaning that before delivering the final answer, the model first generates a “chain of thought” to enhance the accuracy of its responses. 
Top-performing model
The buzz around DeepSeek’s R1 seemingly picked up steam after Alexandr Wang, CEO of Scale AI, touted its competitiveness against the best products from the U.S. megacap tech giants, which were thought to be leading the AI war. Scale AI provides data to help companies train their AI tools.

“What we found is that DeepSeek, which is the leading Chinese AI lab, their model is actually the top performing, or roughly on par with the best American models,” Wang said on CNBC from the World Economic Forum in Davos, Switzerland, last week.
Wang said DeepSeek actually has more H100 chips from Nvidia than expected — about 50,000 of them. Those chips are the processor of choice for AI firms in the U.S. such as OpenAI, and the U.S. has banned the sale of advanced AI chips to China.
Nvidia shares took a 3% hit Friday as chatter about DeepSeek started to pick up.
No. 1 app
Over the weekend the hype surrounding DeepSeek reached a fever pitch on social media.
Marc Andreessen, co-founder and general partner of venture capital firm Andreessen Horowitz, sang DeepSeek’s praises on X, saying the R1 model is “one of the most amazing and impressive breakthroughs” he’s ever seen. Andreessen’s portfolio includes Airbnb and dozens of AI companies.
Tech investor Chamath Palihapitiya on X pointed to DeepSeek’s “very good” report, which said its R1 model “essentially cracked one of the holy grails of AI: getting models to reason step-by-step without relying on massive supervised datasets.”

The Chinese AI app DeepSeek is seen in Apple’s U.S. app store on an iPhone 12, Jan. 27, 2025. In the ranking of free apps, DeepSeek was even ahead of ChatGPT from OpenAI.
Picture Alliance | Getty Images

By this point, DeepSeek’s mobile app surged to the top of Apple’s app store download charts over the weekend in the U.S., marking a tangible threat to pricier models such as OpenAI’s ChatGPT.
U.S. futures were down big overnight Sunday and investors woke up to a sea of red Monday morning.

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Nasdaq Composite, 1-day

AI darling and chip producer Nvidia saw shares tumbling 16.9% on Monday for its worst day since March 2020.

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Nvidia, 1-day

Other chipmakers as well as power providers were hit big. The tech-heavy Nasdaq Composite was down more than 3% on Monday, dragged down by megacap names. More

“Get your $TRUMP now,” came the message from America’s president-elect three days before his inauguration. The commander-in-chief’s meme cryptocurrency, the aggregate value of which has so far peaked at almost $15bn, is far from the only sign of the administration’s ardour for digital assets. One new government department (DOGE) has been christened after another meme coin. It is now quicker to list people close to the president who do not have significant financial interests in crypto than those who do. For anyone not paying attention, an executive order on January 23rd made things clear: digital assets, it announced, would play “a crucial role in innovation and economic development in the United States, as well as our Nation’s international leadership”. More

American Express’ affluent cardholders got comfortable spending more freely again late last year, Chief Financial Officer Christophe Le Caillec told CNBC.
Spending on AmEx cards jumped 8% year over year in the fourth quarter after slowing down from a 7% growth rate early in the year to 6% in the second and third quarters, according to the firm’s earnings presentation.
The pickup was especially fueled by millennials and Gen Z users, who spent more on experiences such as travel and entertainment.

Silas Stein | Picture Alliance | Getty Images

American Express’ affluent cardholders got comfortable spending more freely again late last year, Chief Financial Officer Christophe Le Caillec told CNBC.
Spending on AmEx cards jumped 8% year over year in the fourth quarter after slowing from a 7% growth rate early in the year to 6% during the second and third quarters, according to the firm’s earnings presentation.

While the year-end pickup was seen across all customer segments and geographies, it was especially fueled by millennials and Gen Z users, where transaction volumes jumped 16%, up from 12% in the third quarter.
Older groups were more restrained with their cards. Gen X customers spent 7% more in the fourth quarter, while baby boomers saw billings rise just 4%.
“We had very strong growth from Gen Z and millennials, and that 2 percentage point acceleration gives us a lot of optimism for 2025,” Le Caillec said.
Elevated transaction levels have continued into the first three weeks of this year, he added.
Younger Americans are said to spend more on experiences rather than goods, and that is reflected in the results from AmEx, which along with rival card issuer JPMorgan Chase, dominate the market for high-end credit cards.

Travel and entertainment billings rose 11% in the quarter, compared with 8% for good and services. The boost in travel came from airline spending, which rose 13%, with spending for business class and first class airfares up 19%, according to Le Caillec.
AmEx shares fell more than 2% in midday trading Friday after the company reported earnings and revenue that were roughly in line with analysts’ expectations. Shares of the New York-based company have been on a tear over the past year, hitting a 52-week high on Thursday.
“We are encouraged by accelerating billings growth as we believe it will be a key factor for Amex to meet its aspirational target of at least 10% revenue growth,” William Blair analysts led by Cristopher Kennedy wrote Friday in a research note. “We remain buyers on any pullback.”

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On the ground in Davos, DEI has been the subject of conversation both on the record and behind closed doors.
Most corporate leaders who spoke to CNBC across the first four days of the summit reiterated that while the language may change and internal policies may be tweaked, company values will remain the same.
Here’s what the heads of JPMorgan Chase, Nasdaq, Cisco and others had to say.

There are three buzzwords among politicians and business leaders at this year’s World Economic Forum annual meeting in Davos, Switzerland: diversity, equity and inclusion.
It’s no surprise DEI is on corporate leaders’ minds, since it’s been front and center at the White House as well.

“My administration has taken action to abolish all discriminatory diversity, equity and inclusion nonsense,” President Donald Trump said Thursday during a virtual appearance in Davos. “America will once again become a merit-based country.”
Trump signed an executive order his first day in office aimed at dismantling the federal government’s diversity and inclusion programs. The order as written only applies to federal government employers, but he also mentioned extending his executive order to private institutions in his comments at Davos.
Following his executive order, his administration has also targeted affirmative action in federal contracting and ordered all federal DEI staff be put on paid leave.
On the ground in Davos, DEI has been the subject of conversation both on the record and behind closed doors, with discussions including the potential of ditching the commonly used acronym and changing external communication around certain policies.
Most corporate leaders who spoke to CNBC across the first four days of the summit reiterated that while the language may change and internal policies may be tweaked, company values will remain the same.

Here’s what executives had to say:

Jamie Dimon, JPMorgan Chase CEO

“We are going to continue to reach out to the Black community and Hispanic community, LGBT community, and the veteran community. … Wherever I go — red states, blue states — mayors, governors say they like what we do. So we’re not trying to pander to any which side or any which thing. Now if you point to something we’re doing that’s wrong, I’d change it. And we will make modifications going forward, but we’re very proud of what we’ve done, and what we’ve done is lift up cities, schools, states, hospitals, countries, companies, and we’re gonna do more of the same.”

Adena Friedman, Nasdaq CEO

“For Nasdaq, we really continue to look at everything that we do in building the right culture. We do believe that a place where we feel like people can be themselves and can operate at their highest potential, and have diversity of views, and diversity of backgrounds, actually makes us a better company and makes us perform better. So we’re going to continue to operate in that way. And I think that at the end of the day, these things come and go with different political cycles, but at the same time, I believe that there’s an undercurrent that continues to be supportive.”

Bill Ready, Pinterest CEO

“People on our platform come from all walks of life, from all different backgrounds, and so we’ve been very focused on how we drive inclusivity in our platform with things like inclusive AI, with things like ‘diversity by default’ in our feed … We’re not [changing anything], and the reason is we’ve seen it’s actually leading to better engagement, there’s consumer demand for it, it’s good for our business.”

Chuck Robbins, Cisco CEO

“I think what happened is there’s a subset of initiatives under the DEI brand that were particularly disliked. And I think the whole thing got blown up because of that … If I’m sitting in a room to try to solve a complex problem or to chase a big opportunity, I want a lot of diverse brains in that room, and I don’t care if it’s gender or if it’s nationality or if it’s just diversity of experience. Diversity in general is good for business. But I think the pendulum swung and I think it was a handful of issues that really triggered it all.”

Robert Smith, Vista Equity Partners CEO

“I think that diversity is a great thing in business. How do I know? Because I look at the data, I look at the facts. When we have diverse teams, our teams are more productive. We have lower risk. We’re actually able to out-produce those who don’t have diverse teams. The facts all suggest that. Now, how that gets implemented and executed, I think is where there’s dialogue and debate. I think companies and executives who actually understand the importance of diverse thinking in the work that they do, in the products that they deliver, and in the markets they serve will benefit long term … We will have to navigate through this, and there may be certain laws to change. We have to make adjustments to it, but people will do the right thing.”

Alexandr Wang, Scale AI CEO

“We operate in an incredibly competitive and fast-moving industry in AI, and I don’t have any option but to hire the best and most brilliant and most capable people for every single job inside my company. So as a result, we have no option but to be meritocratic … And in the process, we achieve diversity.” More

Offering 23 of its shares for 10 of its acquisition target, Monte dei Paschi values Mediobanca’s stock at roughly €15.992 each, a 5% premium to the close price of Jan. 23.
Monte dei Paschi, the world’s oldest bank, required a state rescue in 2017 after years of crippling losses, but has turned the tides of its fortunes under the leadership of UniCredit veteran Luigi Lovaglio.
The Friday offer adds to a picture of heating M&A appetite in Italy’s banking and financial services sector.

Photographer | Collection | Getty Images

Italy’s bailed-out Monte dei Paschi di Siena on Friday launched a 13.3 billion euro ($13.95 billion) all-share takeover offer for larger domestic peer Mediobanca.
Shares of Monte dei Paschi (MPS) were down 7.97% at 11:39 a.m. London time, with Mediobanca up 6.28%.

Offering 23 of its shares for 10 of its acquisition target, Monte dei Paschi values Mediobanca’s stock at roughly €15.992 each, a 5% premium to the close price of Jan. 23. The proposal will have to be approved at a shareholder meeting on April 17.
The equity of Monte dei Paschi was worth 8.7 billion euros as of the Jan. 23 close, while Mediobanca’s market capitalization stood at at 12.3 billion euros, according to FactSet data.
CNBC has reached out to Mediobanca for comment.
Under the offer terms, Monte dei Paschi estimates pre-tax benefits of 700 million euros a year from the transaction, which would help it to leverage tax credits from previous sustained losses and add 500 million per year for the next six years.
The lender, which intends to delist Mediobanca, hopes to close the transaction by the end of September, Monte dei Paschi CEO Luigi Lovaglio said in a briefing.

“Mediobanca is the best fit at the best time for a powerful business combination,” he added. “We will leverage on the excellence of the two brains, preserving their unique positioning. The new Italian champion will be resilient with [a] diversified business mix.”
In a Friday note, KBW Analysts Hugo Cruz and Ben Maher noted the proposal has “limited” synergy potential and chances of success.

Monte dei Paschi, the world’s oldest bank, required a state rescue in 2017 after years of crippling losses, but has turned the tides of its fortunes under the leadership of UniCredit veteran Lovaglio. The Italian government retains a 11.73% stake in the lender, after decreasing its position in a bid to reprivatize the lender.
Delfin, the holding company of late billionaire Leonardo del Vecchio, has increased its position to 9.78% since January, with business tycoon Francesco Gaetano Caltagirone now holding 5.03%. Delfin and Caltagirone are the largest shareholders of Mediobanca, with 19.8% and 7.8%, respectively.
“The transaction could contribute to complete the dynamics of the Italian financial system, in the context of strong consolidation,” Italian banking union Fabi said after the offer announcement, according to a CNBC translation. “MPS, historically at the center of complex events, is now moving in an ambitious direction. The bid confirms, among other things, that MPS has completely recovered.”
Amid a helpful high-interest environment, Monte dei Paschi was last year able to offer its first dividend in 13 years, posting a CET1 ratio — a measure of a bank’s strength and resilience — of 18.3% in the third quarter.
The Friday offer adds to a picture of heating M&A appetite in Italy’s banking and financial services sector, where the country’s second-largest bank UniCredit previously offered to buy out Banco BPM, which in turn seeks to acquire fund manager Anima Holding. Monte dei Paschi was itself a potential takeover target for UniCredit until talks recently collapsed in 2021.
 — CNBC’s Silvia Amaro and Ganesh Rao contributed to this report. More