April 12, 2024

MILAN, Oct 3 (Reuters) – New restructuring commitments agreed by Italy and the European Union over state-owned bank Monte dei Paschi di Siena (MPS) (BMPS.MI) include disposals worth up to 400 million euros ($391 million), a document showed on Monday.
The text of the EU Commission's decision that extended an end-2021 deadline for Rome to sell its stake in the Tuscan bank also showed Italy had committed to keeping the management of its holdings in various state-owned banks separate.
In addition to its 64% stake in MPS, Italy owns Southern banks Popolare di Bari and MCC. Some political parties have called for Rome to keep MPS in public hands and merge it with other state-owned lenders.
After failing to clinch a sale of MPS to UniCredit (CRDI.MI) last year, Italy has secured a new deadline to re-privatise the bank it rescued in 2017 from the EU agreeing to new restructuring goals.
"The revised commitments are consistent with the strategic plan the bank approved in June … whose implementation is underway and in line with the schedule," MPS said in a note.
To cut costs to 60% of income in 2024 as agreed with the EU, MPS needs to raise up to 2.5 billion euros in capital, and sources have said it aims to launch a new share issue on Oct. 17.
To that aim, it is working to reach an accord with some cornerstone investors led by the bank's commercial partners Anima Holding (ANIM.MI) and AXA (AXAF.PA) this week.
Unlike for insurer Axa, asset manager Anima's support is subject to a revision of its commercial accord with MPS. A person close to the matter said the parties were trying to hammer out diverging views over the new terms.
A consortium of banks working with MPS on the share sale is expected to decide at the end of the week whether to commit to mop up unsold shares, another person close to the banks said.
MPS needs to carry out property disposals worth 100 million euros and sell non-core equity holdings, including stakes in ATM-machine operator Bancomat and credit card firm Visa (V.N) which had a value of 250-300 million euros at the end of last year, the document said.
Alternatively, MPS can sell its stake in Italy's central bank, the EU said.
The bank has also failed to meet an existing commitment to reduce its leasing portfolio, which stood at 3.3 billion euros at the end of last year, or 700 million euros above target, the EU said in its decision.
"The bank shall carry on a deleveraging of its leasing portfolio, also by means of sale of assets," it added.
MPS aims to offload leasing contracts by the end of the year by joining forces with other Italian banks on a bad loan securitisation transaction worth in aggregate 1 billion euros, a source close to the matter told Reuters.
The securitisation deal would make use of a state guarantee scheme which is in the process of being renewed.
($1 = 1.0228 euros)
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The dollar rose on Wednesday, a day after suffering its biggest one-day drop in more than two years, as the excitement of the previous day's rally in stocks and risk friendlier currencies wore off.
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