Shareholders in Monte dei Paschi di Siena on Wednesday voted to reinstate former chief executive Luigi Lovaglio, reversing his removal last month and ending a bitter boardroom dispute tied to the bank’s takeover of Mediobanca.

According to Reuters, investors representing more than 64 per cent of the bank’s share capital backed a rival slate of directors that included Lovaglio, handing him control after a contest against candidates put forward by the outgoing board. His supporters secured eight board seats, while the opposing group won six.

The vote followed Lovaglio’s dismissal in March after disagreements with directors and leading shareholder Francesco Gaetano Caltagirone over strategy for Mediobanca, the Milan-based investment bank acquired last year in a deal valued at around €16bn. Lovaglio had proposed a rapid integration and delisting of Mediobanca, while Caltagirone favoured maintaining its listing.

Reuters reported that backing from Delfin, the Del Vecchio family holding company, alongside international investors including BlackRock and Norges Bank, proved decisive in returning Lovaglio to the helm. His opponents, led by Caltagirone, controlled roughly a quarter of the bank’s capital.

Jerome Legras, head of research at Axiom Alternative Investments, told Reuters that “the international investors won and Caltagirone lost this time, but the worry is that the (new) board will be a stormy one”, pointing to the potential for continued governance tensions.

The leadership battle has wider implications for Italy’s banking sector, as Monte dei Paschi positions itself for further consolidation following its acquisition of Mediobanca. The combined group is now a significant shareholder in insurer Generali, a strategic asset at the centre of longstanding rivalries among Italian financial investors.

Lovaglio signalled his intention to press ahead with his strategy, telling reporters: “I’ll keep working on a project that is important for Italy’s financial system and the country.” His plan to merge Mediobanca into Monte dei Paschi is expected to remain a focal point for regulators and investors.

Reuters reported that concerns had previously been raised by the European Central Bank over governance and the suitability of alternative chief executive candidate Fabrizio Palermo, particularly given his lack of commercial banking experience. Palermo was nevertheless elected to the board alongside other nominees.

The dispute also unfolds against the backdrop of ongoing investigations in Milan into an alleged pact involving Lovaglio, Caltagirone and Delfin chief Francesco Milleri to influence control over Mediobanca and Generali. All parties deny wrongdoing.

A small shareholder attending the meeting told Reuters that “for the people of Siena it’s a matter of identity”, backing Lovaglio’s return and reflecting local support for the executive credited with stabilising the bank since 2022.

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