It also proposes that Corrado Passera, a former Italian industry minister and also a former chief of Italy’s biggest retail bank Intesa Sanpaolo becoming Monte dei Paschi’s new CEO, the paper said.
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“While bank management have approved this new recapitalization plan, it would take an extraordinarily fearless or foolhardy, take your pick, investor to put money into this festering black hole that has already seen two bailouts come and go”, he said in a note.
Monte dei Paschi was by far the worst performer in stress tests of 51 European banks but sought to head off any speculation about its future with the announcement late Friday of a 5 billion euro ($5.6 billion) capital injection from investors.
Particularly the nearly €50 billion of sour loans at BMPS were a major concern, prompting the European Central Bank to ask the bank to cut its non-performing loan exposure to €14.6 billion by 2018.
As was expected, BMPS came out at the bottom of the stress tests and was the only lender that “failed” the exercise.
Brussels on Monday said the European Union (EU)’s banks showed increasing resilience in a stress test. Italian banks Banco Popolare and Ubi Banca closed down 5 per cent and 6.2 per cent, respectively.
In the UK’s banking sector things were a little better stocks wise, and all but one major lender in the United Kingdom lost value on the day.
Renzi said in an interview with Italian daily La Repubblica: “We have lived with the risk of extraordinary budget measures for three years, but I can categorically say there won’t be any in 2016”.
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Trading in the shares of Italy’s No. 2 bank UniCredit (UNCFF) was suspended three times on Monday, after the Milan institution slipped past several thresholds and at one point fell by more than 8% compared with Friday’s closing price of €2.19 ($2.45) a share.
