MILAN (Reuters) – Banco BPM Chief Executive Giuseppe Castagna on Saturday ruled out a potential acquisition of Monte dei Paschi di Siena saying the state-owned bank is too big to swallow.

Monte dei Paschi is 64% owned by the Italian state, which needs to eventually cut its stake to meet re-privatisation commitments given to the European Union at the time of the bailout.

“We’re too small,” Castagna said when asked about Monte dei Paschi.

On Friday Intesa Sanpaolo CEO Carlo Messina said his bank’s market share in Italy was such that it prevented any domestic M&A when asked about Intesa’s potential involvement in Monte dei Paschi’s re-privatisation.

Earlier this week UniCredit Chief Executive Andrea Orcel said conditions were not in place at present for his Italian bank to reconsider an acquisition of the Tuscan bank, from which UniCredit walked away in 2021.

Castagna, who is up for reappointment in April, has repeatedly said he wants to build a third large banking group around Banco BPM but lacked the right partner.

Italy’s right-wing government has said it regards positively the possibility of creating a third large banking group around Monte dei Paschi.

Bankers say a deal with Monte dei Paschi could help Banco BPM loosen the grip of Credit Agricole the French bank which last year became Banco BPM’s single biggest investor.

(Reporting by Andrea Mandalà and Valentina Za, editing)

FILE PHOTO: Banco Monte dei Paschi