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