* First board meeting since bank had to delay cash call
* Chairman, CEO not expected to step down
By Silvia Aloisi
MILAN, Jan 14 Monte dei Paschi di Siena's
chairman and CEO are not expected to go through with a
threat to quit on Tuesday when the bank's board meets for the
first time since its largest shareholder forced the delay of a
vital share issue.
On the agenda is the future of Chairman Alessandro Profumo
and Chief Executive Fabrizio Viola, who had both threatened to
resign last month after their proposal for a share sale in
January was voted down.
The two are among Italy's most respected bankers and their
departure in the middle of the bank's turnaround plan would have
dealt a serious blow to Monte dei Paschi's hopes to pull off the
rights issue, whose size is bigger than its 2.1 billion euro
Last month, shareholders voted to put off until mid-May at
the earliest the 3-billion euro ($4 billion) share sale which
Italy's third largest bank needs to pay back state aid and avert
The success of the capital increase, which bankers now
expect to be launched in June, is a key condition set by the
European Commission for approving the 4.1 billion euros
government bailout that Monte dei Paschi received last year.
Italy's handling of Monte dei Paschi's problems is regarded
as a test of the country's ability to deal with its weaker banks
in the run-up to a health check-up of the sector by the European
Bankers close to the matter have told Reuters Profumo and
Viola were likely to stay on, and union sources who held talks
with Economy Minister Fabrizio Saccomanni on Monday said he did
not expect them to leave.
Italian newspapers said that Saccomanni, worried about the
fate of the Tuscan bank, had asked both managers to remain in
their jobs to complete its restructuring.
If they do stay, one of the first tasks for Profumo and
Viola will be to renegotiate a preliminary accord with a
consortium of banks that had agreed to underwrite the capital
increase if it was launched by end-January.
They will also watch closely negotiations between the bank's
largest shareholder, a not-for-profit foundation with close ties
to local politicians, and potential buyers.
The foundation, whose 33.5 percent stake in the bank is big
enough to veto any unwanted decision, forced the capital
increase postponement. The foundation wanted a delay to give it
more time to sell down its holding to pay back 340 million euros
According to three bankers familiar with the issue, the
foundation is in talks with other banking foundations and
private equity and hedge funds, including Blackstone and
possibly Elliott Management Corp.
The foundation declined to comment. Monte dei Paschi
declined to comment.