Banca Monte dei Paschi di Siena SpA

Italian Prime Minister Mario Draghi's new government aims to deal with problem bank Monte dei Paschi by pushing ahead with plans to re-privatise the loss-making lender, a source close to the matter said.

UniCredit will consider Monte dei Paschi among its options for growth but Italy's second-biggest bank will only pursue a takeover that is in the interest of all of its shareholders, its chairman designate was quoted as saying.

* UniCredit CEO change hampered merger contacts (Recasts after statement)

The board of Italian state-controlled bank Monte dei Paschi met on Thursday to discuss ways to raise cash and ensure business continuity, sources said, with a proposed merger favoured by the government remaining elusive.

* Change of guard complicates MPS deal for Treasury (Recasts after statement)

UniCredit's board will designate Andrea Orcel as the bank's new chief executive on Wednesday, two sources told Reuters, paving the way for his appointment in April and leaving the fate of Italian rival Monte dei Paschi (MPS) in limbo.

Banco BPM has not changed its stance in relation to Monte dei Paschi and it does not include the Tuscan rival among possible merger options being considered, a source close to Italy's third-largest bank said on Tuesday.

Eyewear tycoon Leonardo Del Vecchio, who owns 1.9% of UniCredit, opposes the lender taking over rival Monte dei Paschi and is in touch with other large Italian investors who share concerns about a potential deal, two people close to the matter said.

Italy's government is working on a plan to take on about 14 billion euros ($17.27 billion) of UniCredit's non-performing loans to make a deal for state-owned Monte dei Paschi more attractive to the country's second-biggest bank, sources said.

Jean Pierre Mustier's decision to step down as CEO of UniCredit had nothing to do with a possible acquisition of bailed-out rival Monte dei Paschi (MPS), UniCredit Chairman-elect Pier Carlo Padoan was quoted as saying on Sunday.

The board of UniCredit would never agree to a transaction that harms the group's interests and its capital position, a spokesman for the Italian bank said on Tuesday.

UniCredit is working with strategic advisers Goldman Sachs and JPMorgan, three people close to the matter said, as it prepares to update its business plan next year and weighs a potential acquisition of state-owned peer Monte dei Paschi.

Italy's Treasury is working on a package of incentives to entice potential buyers for Monte dei Paschi, including a scheme to hive off pending legal disputes that hamper a sale of the bailed-out bank, three sources familiar with the matter said.

* Monte dei Paschi faces capital shortfall (Adds details on privatisation plans)

Italy's Treasury asked financial and legal advisers on Friday to pitch for a role in the privatization plan for Monte dei Paschi as it aims to secure a merger deal for the ailing lender, two sources familiar with the matter told Reuters.

The CEO of Monte dei Paschi told directors on Monday the bailed-out Italian bank needs 1.5-2.0 billion euros ($1.7-$2.3 billion) in cash to avoid breaching capital requirements in the first quarter of 2021, a source with knowledge of the matter said.

* Cash call among options being considered (Adds details, comments)

* Reprivatisation plans meet resistance by co-ruling 5-Star (Adds comment from source on capital strengthening)

UniCredit is demanding clients book an appointment to access its branches, a spokesman for Italy's second-biggest bank said on Thursday, as the country battles daily new records in COVID-19 infections.