Italian banking crisis: Monte dei Paschi boss to produce new business plan by February

 
Hayley Kirton
Follow Hayley
ITALY-BANK-MONTE-PASCHI-DI-SIENA-ECONOMY-FINANCE
The world's oldest bank's rescue plan fell through shortly before Christmas (Source: Getty)

The boss of Monte dei Paschi di Siena is drawing up a new business plan for the troubled lender, with the aim to get it polished off by February.

Shortly before Christmas last year, the bank's private sector rescue deal, designed to pump €5bn (£4.4bn) of capital into the lender's coffers, collapsed after it failed to get the backing of key investors. It is now waiting on funding from the government.

To secure these state funds, the world's oldest bank will need to present a business plan to European Central Bank and European Commission.

Read more: Unicredit shareholders approve Italy's largest ever rights issue

Italian news outlet Il Sole reported over the weekend that chief executive Marco Morelli had told concerned unions the new plan would be ready by next month, while he would be discussing it in principle with EU regulators shortly.

The bank has already had an attempt at drafting a plan for its future, but it is understood the Italian government told it to have another go, focusing more on decreasing risk and increasing profitability.

Read more: Monte shares close down 12 per cent on reports bailout has flopped

The lender is also planning to issue between €1.5bn and €2bn in bonds at some point in January, which it will be able to do off of the back of the state guarantee on its financial future.

Shares in Monte dei Paschi have been suspended since 23 December.

Related articles