Losses deepen at Italian bank Monte dei Paschi

Tim Wallace
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TROUBLED Italian bank Monte dei Paschi yesterday reported another steep rise in losses, despite hints of a recovery in the country’s economy.

The bank lost €174m (£142m) in the first three months of 2014, up 72.3 per cent from the €101m lost in the same period of 2013.

Revenue from fees and commissions increased 3.2 per cent on the year to €445m, an improvement more than offset by interest income diving 25.4 per cent to €446m.

Overall banking and insurance revenues came in at €957m, down 18.3 per cent on the year.

Meanwhile impairments on bad loans fell 1.6 per cent to €477m.

Operating expenses dived 9.4 per cent on the year to €661m, in part as personnel expenses fell 5.2 per cent to €429m.

Despite its woes, Monte dei Paschi’s chief finance officer insisted the bank will be able to pay back the funds it has borrowed from the European Central Bank.

In a presentation posted on the bank’s website, Bernardo Mingrone said he expects to pay back the Long-Term Refinancing Operation (LTRO) funds by early 2015, on target with the original timeline.

It paid back €4bn last month, leaving it with another €24bn to repay by February next year.

Monte dei Paschi’s core capital ratio now stands at 13.3 per cent, following a €5bn capital increase, improving its stability.

The bank’s shares were up 5.19 per cent in the day, with the details of the losses published after markets closed.

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