MILAN (Reuters) - The absence of buyers at the moment makes it difficult for the Mef to reduce its stake in Mps through a merger, and the placement of share packages on the market could instead give the Tuscan bank time to move forward on the value creation path started under CEO Luigi Lovaglio, two sources close to the dossier report.

The Ministry of Economy and Finance holds 64 percent of the Sienese bank following the bank's bailout in 2017, which was authorized by the EU on condition that the state aid provided is temporary.

Having failed in late 2021 to sell to UniCredit, the Treasury entrusted Mps to Lovaglio, the former CEO of Poland's Bank Pekao, who last fall closed a 2.5 billion capital increase that remained in the balance until the very end due to the market situation.

Since then, both UniCredit and Banco Bpm have repeatedly denied any interest in a deal which, it is pointed out in the market, the capital increase and the bank's profit outlook after the 4,000 redundancies financed with fresh money have made it significantly more expensive for buyers.

According to sources, the Treasury is increasingly considering the possibility -- anticipated by Reuters in May -- of reducing its stake through equity placements, giving management time to continue generating value for Monte's shareholders.

A ministry spokeswoman clarifies, however, that no decision has been made on the future of Mps.

(Reporting Giancarlo Navach, editing Claudia Cristoferi)