REFILE-Banca Monti dei Paschi can avoid state taking stake-report

Mon Jan 7, 2013 3:09am EST

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(Adds dropped words "the state" in first paragraph)

MILAN Jan 7 (Reuters) - Italy's Banca Monte dei Paschi di Siena can return to profit and can avoid having the state take a stake in it, the chief executive of Italy's third-largest bank was quoted saying in a newspaper interview on Monday.

"We need to re-create the conditions so we can return to profit, and all the decisions we have taken in recent months go in that direction," said Fabrizio Viola in an interview with Rome daily Il Messaggero.

"Only by returning to the stable asset base and profitability that has characterized the bank for its long history can we avoid public support."

Last year the bank was forced to request state aid after it failed to meet tougher capital requirements set by the European Banking Authority.

Under the scheme the bank will issue 3.9 billion euros ($5.1 billion) of bonds to the Italian treasury. If the bank posts a loss, the treasury may have to take a stake in it. (Reporting by Jennifer Clark; Editing by David Holmes)

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