Banca Monte dei Paschi di Siena plans to cut 2,600 jobs, close 500 branches and sell bad debt in a bid to attract investors to a turnaround that is key to the lender’s survival.
The world’s oldest bank is targeting annual profit of €1.11 billion in 2019. The bank is also disposing of its platform to recover bad debt, Monte Paschi said in a statement on Tuesday.
Shareholders will meet November 24th to approve a plan to raise as much as €5 billion of new capital.
Chief executive Marco Morelli, in the job for just six weeks, is seeking to persuade shareholders that the bank can turn a corner by shedding bad loans and reorganising to improve returns.
Burdened by soured debt and losses on derivatives bets gone wrong under previous management, Paschi emerged as the most vulnerable lender in European stress tests in July, prompting the latest overhaul and the third capital increase in two years. – Bloomberg
