The Italian bank Monte dei Paschi di Siena, the third financial institution of the country, failed in his attempt to raise 5,000 million euros in the Bag for its recapitalisation, which leaves it at a step of a rescue with public money.
The Italian bank Monte dei Paschi di Siena, the third financial institution of the country, failed in his attempt to raise 5,000 million euros in the Bag for its recapitalisation, which leaves it at a step of a rescue with public money.
"it was Not possible to reach the sum of 5,000 million euros," said the Monte dei Paschi di Siena, which stressed that the expansion of capital is affected by the lack of "investor of importance."
The bank had indicated that its voluntary conversion of bonds into shares allowed him to get –virtually– slightly more than 2,400 million euros, less than half of the target.
During the session were disclosed information that indicated that the board of Monte dei Paschi will meet to agree on the financial assistance application to the State, after the Italian Parliament approved the creation of a fund to help the banks with problems, including the months before a highlight is the entity in tuscany.
"The low probability of reaching the amount needed increases the chances of a public rescue," he said in earlier days Ipek Ozkardeskaya, analyst at LCG, who mentioned that "the lack of appetite activates a signal of alarm" and stated that "the failure of the operation to save the bank could shake severely all over the european banking sector".
At the beginning is week, Quaestio, Fund manager Atlantis, announced that it had decided to approve the purchase of 1,500 million euros (1,560 billion) of bad loans from the entity, an essential part of the rescue package private, then you have declared "deep reservations" about it.
But the bank expected to get 1,000 million supplementary fund Qatar Qia or a participation of other funds, chinese or americans.
"If the difference (between what has been achieved and the lens) is limited, the government could intervene and inject probably up to 1,000 million euros without recourse to the holders of titles", said days before the economist, Lorenzo Codogno, founder of LK Macro Advisors Limited and a former director general in the ministry of Finance Italian.
But "if it fails the whole operation, the government will have to intervene with a recapitalization preventive", he added.
This process requires, prior to the injection of public money, a contribution of shareholders and bondholders, through a forced conversion of the securities at a level much lower than its nominal value.
Approved rescue
The government of Italy adopted in the early hours of Friday a decree that will pave the way to the rescue of Monte dei Paschi di Siena, after the bank didn’t get investors to support the vital plan of increase of capital.
The prime minister, Paolo Gentiloni, told reporters that his cabinet has authorized the creation of a fund of 20,000 million euros (21,000 billion dollars) to shore up the banking sector and Italian and that it expected Monte dei Paschi to be the first to ask for help.
"Today marks an important day for Monte dei Paschi, a day that sees him turn a corner and be able to reassure their depositors", said Gentiloni.
Preserve the savings
The government provides for a mechanism to compensate for the losses of the small savers, since many italians have subscribed to this type of obligations without knowing their real risk. A little more than 40,000 individuals have the obligations of Monte dei Paschi.
After that the Parliament approve the borrowing, Pier Carlo Padoan, Italian minister of Finance, stated that the public intervention is intended to "maintain financial stability" and to "preserve the savings" of the italians; he stressed that the banking system of your country is a "solid, despite a few situations of crisis".
Bankruptcy is coming to come
Monte dei Paschi, the oldest bank in the world, founded in 1472, is in difficulties for years, weakened first by the disastrous purchase in 2007 of Banca Antonveneta, and then by a scandal of misappropriation of funds, which has accumulated losses of 14,000 million euros between 2011 and 2015.
From 2014 has carried out two capital increases for a total amount of 8,000 million euros, money that has already fizzled out.
it Also recorded the worst results of the tests of resistance published in late July by the European Banking Authority. These tests measure the ability of a bank to cope with shocks short-term.
In this context, the actions of the Monte dei Paschi, which have lost about 90% of its value so far this year, fell to 7.48% on the Milan Stock exchange, up to 15.08 euros. A price that is very far from 125 euros in the who were listed by the end of 2015.
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