Editions:  Austria · Denmark · France · Germany · Italy · Norway · Spain · Sweden · Switzerland
Advertisement

Italian bank backs €5bn capital boost plan

Share this article

Italian bank backs €5bn capital boost plan
Monte dei Paschi di Siena has given the go-ahead to a €5.0 billion equity raise. Photo: Fabio Muzzi/AFP
16:25 CEST+02:00
Italian bank Monte dei Paschi di Siena gave the go-ahead on Friday to a €5.0 billion equity raising that will boost its capital and allow it to repay a government bailout this year.

The bank said in a statement the share sale would give it a strong enough "capital buffer" to withstand EU bank stress tests in the current climate of "high uncertainty and limited visibility".

The increase will also allow the lender to speed up a restructuring plan, due to be completed by 2017, that includes 8,000 job cuts and the closure of 550 branches.

The Tuscan bank has to pay back by the end of the year some €4.0 billion in credit it received from the Italian government last year to stave off bankruptcy.

Chief executive Fabrizio Viola told Italian news channel SkyTG24 that the share sale would be carried out "starting in mid-June until mid-July".

The larger-than-expected raising will also put the bank out of risk of being nationalised, he added.

Instead, Monte dei Paschi said the share sale would put it in a better position to seize "opportunities linked to a possible recovery of macro-economic conditions".

Investors cheered the news, with the bank's share price rising 2.81 percent to 0.2375 euros after the move.

Friday's board meeting also called an extraordinary meeting of shareholders for May 20-22 that will have to give its own approval for the capital increase.

Don't miss a story about Italy - Join us on Facebook and Twitter.

Get notified about breaking news on The Local

Share this article

Advertisement

From our sponsors

You won't believe how many Stockholmers are actually immigrants

To celebrate International Migrants Day, the team at Beyond Borders hit the streets to chat with Stockholmers about where they come from.

Advertisement
Advertisement
Jobs
Click here to start your job search
Advertisement
Advertisement

Popular articles

Advertisement
Advertisement