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Monte dei Paschi investor CariFirenze doesn't plan to sell stake

FILE PHOTO: Italy's problem bank casts long shadow over Draghi's summer break

FLORENCE, Italy (Reuters) - A local banking foundation that invested in Monte dei Paschi's new share issue last year said on Friday it had no plans to sell the stake it built under efforts to make the lender part of a larger banking group.

Speaking to Reuters on the sidelines of an event, the chairman of banking foundation CariFirenze, Luigi Salvadori, said the Monte dei Paschi (MPS) stake was not a purely financial investment but a strategic one "because we believe there is a need for another large banking group."

CariFirenze was one of several banking foundations - traditionally investors in Italian lenders - that responded to an appeal by the Italian Treasury to back the make or break share sale.

"We also liked CEO Luigi Lovaglio's plan," Salvadori said.

France's AXA and an Italian pension fund have both recently sold MPS stakes they acquired in the rights issue, taking advantage of a share price rally to book a profit.

Italy's Treasury is seeking a buyer for state-owned MPS.

(Reporting by Silvia Ognibene, Wriring by Valentina Za; editing by Gianluca Semeraro and Susan Fenton)