Bowing to European Union requests, loss-making Italian bank Banca Monte dei Paschi di Siena unveiled thousands of new job cuts yesterday and asset sale plans in a bid to return to profit and stave off nationalisation.

Italy’s third-largest lender by assets had received €4.1 billion in state loans earlier this year after the euro zone crisis and a derivatives scandal brought it to the brink of collapse.

But European Commission has said it would only give a green light to the state aid if the bank produced a new turnaround plan and agreed to a larger-than-planned €2.5 billion share sale, roughly equivalent to its market value.

In the new plan, the bank’s second in 18 months, Monte dei Paschi said it would shed around an additional 3,400 jobs and target €440 million of cost cuts. – (Reuters)