January 15, 2014 / 6:52 AM / in 4 years

Monte Paschi rights issue crucial for Italy banking system-chairman

MILAN, Jan 15 (Reuters) - Failure by Italy’s troubled Banca Monte dei Paschi di Siena to carry out a vital $4 billion capital hike later this year would bring down the country’s entire banking system, Chairman Alessandro Profumo told Italian daily La Repubblica.

Profumo was speaking in an interview published a day after he and CEO Fabrizio Viola agreed to stay on at the bank despite being forced to delay the rights issue to mid-2014 by Monte dei Paschi’s top shareholder, a cash-strapped charitable foundation with strong local political ties.

“I sincerely hope that the foundation can find the right interlocutors. And I strongly hope that this can be done quickly. Because, and I want to say it very clearly, if we fail to carry out the capital increase, it’s not just Monte Paschi that is at risk, but the entire Italian banking system,” Profumo was quoted as saying.

Profumo also said he and Viola decided not to quit to increase the chances of success of the capital increase, which remains difficult but, without the two executives, “would have been impossible.”

The top manager also said the best option for the bank would be for one or more financial investors to become shareholders. (Reporting by Lisa Jucca; Editing by Mark Potter)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below