Monte dei Paschi tries to win over opposition to rights issue

 
City A.M. Reporter
ITALIAN bank Monte dei Paschi di Siena would be nationalised without a capital injection and disappear from its base in Siena, bank executives said in an attempt to overcome local opposition to its planned rights issue.

Yesterday’s warning came as the European Commission gave a green light to the bank’s restructuring plan in Brussels, saying it would ensure a return to viability.

The board of the bailed-out Tuscan bank on Tuesday approved a cash call of up to €3bn (£2.4bn), more than its market value, to avert nationalisation. It hopes to complete the share sale in the first quarter of 2014.

“It should be very clear to Siena that any nationalisation would mean the disappearance of the bank from the city,” chairman Alessandro Profumo told newspaper La Repubblica in an interview.

The capital increase was part of a restructuring demanded by EU regulators in order to approve the €4.1bn in state aid the lender received this year.