Milan The shareholders of the troubled Italian money house Monte dei Paschi di Siena have cleared the way for a sale of the oldest bank in the world. They agreed on Sunday to a long-awaited restructuring plan for the bank’s bad loans, which should facilitate the takeover of the state-owned and loss-making bank by a healthier rival.
At an extraordinary shareholders’ meeting, the shareholders agreed to reduce the proportion of loans at risk of default to 4.3 percent of total lending. This will be made possible by transferring 8.1 billion euros in impaired loans to the state “bad bank” Amco – along with other balance sheet items, including 1.1 billion euros in capital.
The deal also includes a bridging loan from the banks UBS and JPMorgan amounting to 3.2 billion euros. This allows Monte dei Paschi to part with the loans without suffering any losses.
The oldest bank in the world was saved from collapse in 2017 with an eight billion euro rescue package from the government. The state currently holds a 68 percent share.
By the end of 2021, Monte Paschi must be privatized again in accordance with the requirements of the EU. The Milan-based bank Banco BMP was recently brought into play as a suitable partner. However, this has indicated that it is not interested in Monte Paschi.
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