MPS approves €3 billion capital increase

MPS approves €3 billion capital increase
Monte dei Paschi's headquarters in Siena. Photo: Stefano Costantini/Flickr
The board of troubled Italian lender Monte dei Paschi - the world's oldest bank - on Tuesday approved a capital increase of up to €3 billion to be completed by the first quarter of 2014.

The aim of the capital increase is to reimburse state aid received by the bank in the form of bonds at the start of this year and interest due for 2013.

The long-awaited decision still needs a formal go-ahead by a meeting of shareholders scheduled for December 27th, the bank said in a statement.

The bank had initially planned a €1 billion capital increase but agreed to increase it following a request from European authorities.

The bank has been waiting for months for a green light from the European Commission on a vast restructuring plan that could now come on Wednesday, Italian newspapers reported.

Investors reacted negatively however, with shares plunging by 6.8 percent in afternoon trading while the main stock market index was up 0.12 percent.

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