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UPDATE 1-Top Monte Paschi shareholder writes down bank's value again
May 6, 2013 / 1:16 PM / 5 years ago

UPDATE 1-Top Monte Paschi shareholder writes down bank's value again

(Adds prosecutor appeal over Nomura seizure)

MILAN, May 6 (Reuters) - The main shareholder in bailed-out Italian lender Banca Monte dei Paschi di Siena has cut its valuation of the bank to a quarter of what it was two years ago after a scandal over risky derivative deals.

The bank, which has Italy’s third-biggest branch network, was forced to take a state bailout of 4.1 billion euros ($5.38 billion) in February to plug a capital shortfall exacerbated by the derivative contracts, which are now at the centre of a criminal probe over alleged fraud.

The Monte dei Paschi foundation said on Monday it had written down its 33.5 percent stake in the bank by another 460 million euros after the scandals, to 952 million euros, following a massive 3.5 billion euro writedown in 2011 that applied to a slightly larger stake.

The foundation, a non-profit entity with strong ties to local politicians in the bank’s base in Siena, ended 2012 with a loss of 194 million euros ($254 million).

The book value of the stake is now 0.24 euro per share, down from 0.36 euro previously. The stock traded at 0.21 euro by 1121 GMT.

The foundation has a further 0.7 percent stake in the bank that it has put up for sale to help repay debt.

Separately, Italian prosecutors investigating alleged fraud at the bank have appealed against a ruling that rejected their bid to seize 1.8 billion euros from Japanese bank Nomura , judicial sources said.

The prosecutors had ordered the asset seizure on April 15 as part of a probe into the derivative deals that brought the Tuscan lender close to collapse, including the so-called “Alexandria” trade with Nomura.

However a judge blocked their request, saying there was no evidence the Japanese broker had made wrongful or disproportionate gains from the deal. Nomura has denied any suggestion of wrongdoing. ($1 = 0.7624 euros) (Reporting by Silvia Aloisi, Silvia Ognibene and Stefano Bernabei; Editing by Patrick Graham and Tom Pfeiffer)

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