Italy’s Banca Monte faces threat of na­tion­al­i­sa­tion af­ter cash call de­lay

The Financial Express - - INTERNATIONAL -

A de­lay to vi­tal fundrais­ing at Banca Monte dei Paschi di Siena has in­creased the risk that Italy’s third-big­gest bank has to be na­tion­alised, a move the gov­ern­ment would like to avoid.

Share­hold­ers led by the big­gest in­vestor in the bailed­out bank re­jected plans for a 3bil­lion-euro ($4 bil­lion) share sale in Jan­uary and post­poned the cap­i­tal rais­ing un­til af­ter May 12. The bank’s chair­man and its chief ex­ec­u­tive may re­sign fol­low­ing the un­prece­dented clash with the main share­holder in the Sien­abased lender, a char­i­ta­ble bank­ing foun­da­tion with close ties to lo­cal politi­cians.

The fo­cus of at­ten­tion now turns to Rome where both the econ­omy min­istry, which has over­sight of bank­ing foun­da­tions, and the Bank of Italy are closely fol­low­ing events.

The world’s old­est bank needs to tap in­vestors for cash to pay back 4.1 bil­lion eu­ros in state aid it re­ceived ear­lier this year and avert na­tion­al­i­sa­tion af­ter be­ing ham­mered by the euro zone debt cri­sis and loss­mak­ing de­riv­a­tives trades.

The cap­i­tal in­crease is part of a tough re­struc­tur­ing plan agreed with the Euro­pean Com­mis­sion in or­der to re­ceive clear­ance for the state bailout.

A trea­sury spokesman said the gov­ern­ment’s pri­or­ity was to give the bailout money back to tax­pay­ers and it had no in­ter­est in na­tion­al­is­ing Monte Paschi, ANSA news agency re­ported on Sun­day evening.

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