Italy sees "fairly rapid" solution for Monte dei Paschi - minister

  • Oops!
    Something went wrong.
    Please try again later.
·1-min read
FILE PHOTO: FILE PHOTO: Banca Monte dei Paschi's headquarters in Siena, Italy
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

SIENA, Italy (Reuters) -Italy expects the timeframe to find a solution for ailing bailed-out lender Monte dei Paschi di Siena to be "fairly rapid", Industry Minister Giancarlo Giorgetti said on Friday.

UniCredit, Italy's second-largest bank, in July entered into exclusive talks with the Treasury to evaluate buying "selected parts" of Monte dei Paschi (MPS), which is 64% owned by the state following a 2017 bailout.

The sale, which would require the state to inject more money into MPS, has become a contentious political issue, further complicated by an upcoming by-election in Siena on Oct. 3-4.

Asked about alternatives for MPS on a visit to Siena, Giorgetti said his government was dealing with a major problem inherited from previous administrations "but I am convinced that it will find the best solution."

Rome has long singled out UniCredit as the best buyer for MPS which needs fresh capital after the bailout that cost taxpayers 5.4 billion euros.

But legal risks following decades of mismanagement, poor loan quality and a weakened commercial franchise have made MPS a tough sell, forcing the Treasury to work hard to line up sufficient incentives for a buyer.

Asked about possible alternatives, Giorgetti said there were "many ideas" but Rome needed to see which ones were feasible as rules and commitments taken with EU authorities to return the Tuscan lender to private ownership were particularly onerous.

He also said he would speak with Prime Minister Mario Draghi about the options.

When asked about a possible road map for MPS, Giorgetti said there were EU-set deadlines and the government would need to see "what can be done".

(Reporting by Silvia Ognibene, writing by Agnieszka Flak; editing by Valentina Za)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting