The bank, the oldest active bank in the world and suffering from a lack of capital, is to negotiate with the ministry of finance and the central bank of rome on the issuance of government-guaranteed bonds worth at least one billion euros, as reported by the italian news agency ansa on sunday, the board of directors of the bank, founded in 1472, is to meet on tuesday.
The background to this is the capital requirements imposed by the european banking authority (EBA) on the tuscan bank, which is headquartered in siena: by the end of june, the institution must increase its capital by around 3.3 billion euros.
Board chairman fabrizio viola had improved the bank’s capital situation with savings cuts, but still lacked 1 to 1.4 billion euros to plug the gap, ANSA further reported. On saturday, the bank postponed a planned board meeting from monday to tuesday for "organizational reasons. The new business plan is to be approved at the meeting. On wednesday, the plan will be presented to analysts. It was already the second meeting postponement. Originally, the board meeting was to be held on 15. June will take place.
Italy’s banks are in a more stable condition than in euro crisis country spain. But unlike other institutions, monte dei paschi has been hit hard by the turbulence, mainly because the bank is sitting on a large amount of italian government bonds. The balance sheet for 2011 shows losses of 4.7 billion euros, mainly valuation adjustments.