MPS stock plunges on analyst report on capital increase
Bank presents changes to reorganization plan to board09 September, 12:54
On Monday the MPS board announced it will discuss reworking its reorganization plan according to European regulator guidelines at its board meeting on Wednesday.
The board aims to approve the new plan at a subsequent board meeting on September 24, in order to resubmit it for European Commission approval.
Italy's third-largest lender presented a restructuring plan to European authorities in June, and has been selling assets and cutting branches in an effort to return to profitability to avoid defaulting on government bailout funds.
In mid-August, the mayor of the Tuscan city where the world's oldest operating bank is based warned the next six months are key for the historic institution that holds a pivotal financial and political role in the region.
''The next six months are crucial to save the bank,'' Bruno Valentini told a news conference held on August 16, before the historic Palio horse race in the city's iconic Piazza del Campo.
The mayor noted that MPS lost 350 million euros in the first half of this year, raising the stakes for the remaining six months.
Earlier this year, MPS became embroiled in scandal amid massive losses and political furore over the previous Italian government's 3.9-billion-euro bailout plan to cover its capital needs, which also threatens the bank with State control should it default.
The bank also became the target of probes early this year after it emerged that a previously undisclosed series of derivative and structured-finance deals produced losses of around 720 million euros for MPS.
Former senior MPS officials - from a previous management - are facing penalties totalling as much as five million euros from the Bank of Italy for alleged fraud and corruption.