Italy Wants To Get Rid Of Its Stake In The World's Oldest Bank, Monte Dei Paschi Di Siena
The Italian government plans to sell a controlling stake in the troubled Monte dei Paschi di Siena, Bloomberg reports, citing sources.
This Bank is the oldest operating credit institution in the world.
68% of the Bank's shares have been controlled by the Italian authorities since 2017.
According to sources, the Italian Finance Ministry is considering selling its stake to UniCredit.
The parties have already discussed the possibility of selling the stake, but at the moment, the sale of UniCredit Bank is only one scenario for the development of the situation.
As noted in turn by Reuters, the Italian government wants to close the deal on the sale of this asset before the end of the current year 2020.
In order to make Banca Monte dei Paschi more attractive to the buyer, the country's financial Department wants to transfer 8.1 billion euros of bad debts of the credit institution into the hands of the asset management company AMCO. In this case, the problem debt of the world's oldest Bank will be reduced four times: from 12% to 4%.
The Italian government's purchase of the Bank saved this world's oldest credit institution in 2017. Then 68% of the shares were sold for 5.4 billion euros. Banca Monte dei Paschi faces a capital hole of more than 8 billion euros. This happened against the background of low-interest rates in Europe, as well as due to low return on assets, weak economic growth in the country, and mistakes of the organization's management.
Bank Monte dei Paschi was founded in 1472 in the city-state of Siena and was engaged in issuing cheap loans to the least well-off segments of the population of the policy.