Italy’s Gualtieri Sticks With Exit Plan for Paschi by 2021

(Bloomberg) -- Italy expects to exit its majority holding in Banca Monte Dei Paschi di Siena SpA by 2021 as agreed with the European Union when the bank was rescued three years ago, Finance Minister Roberto Gualtieri said.

“The first step in the exit strategy has been the de-risking operation that was jointly announced by Monte Paschi and Amco in late June,” Gualtieri said in an online event hosted by Bloomberg. The exit will be completed according to the “rules that were agreed since the beginning,” he said.

Last month Monte Paschi approved a plan to take more than 8 billion euros ($9 billion) of soured debt off its books, a key step in the state-rescued bank’s recovery. The deal, which will reduce the bank’s non-performing loan ratio to 4.5% from 12.4%, may favor an exit strategy that involves merging the bank with an Italian peer.

“Of course we will respect the deadline” of 2021 set by commission, Gualtieri said. Monte Paschi will be a success story of a bank crisis that was “managed, addressed and solved,” according to the finance minister. He declined to comment on whether there are ongoing talks with other lenders.

Monte Paschi, founded in 1472, is 68% owned by the Italian state after a government-backed recapitalization in 2017. Undermined by souring loans and derivatives deals that backfired, the bank received a 5.4-billion-euro bailout from the government. Since then, it has struggled to deliver consistent profits as the bank’s strategic maneuvers are limited by the terms the EU demanded in return for supporting the government aid.

The management of the bank will play its role in the finalization of the exit process “and obviously the government will support this process,” Gualtieri said. Guido Bastianini was appointed as chief executive officer in May, replacing Marco Morelli.

The government paid 6.48 euros a share for its stake in the bank in July 2017. The stock closed on Tuesday at 1.54 euros.

©2020 Bloomberg L.P.