MPS considering five-bn euro capital increase: sources

Share value in troubled bank fall on rumours of large offering

(ANSA) - Rome, April 15 - Management at troubled Italian bank Monte dei Paschi di Siena (MPS) are considering boosting a capital increase plan to five billion euros from a previous planned increase of three billion euros, sources said Tuesday.
    MPS confirmed that a capital increase beyond the initial plan is under consideration and media reports said the maximum could reach five billion euros.
    Shares in the world's oldest operating bank fell by more than 9% during trading on the Milan stock exchange Tuesday amid the rumoured capital increase, which reports say is needed to repay a government bailout of 4.1 billion euros made in late 2012.
    Failure to repay that loan could see MPS nationalized, the bank's chairman warned last December.
    Any capital increase would need to be approved by shareholders in MPS, Italy's third largest bank.
    MPS recapitalized in 2012 and again in January 2013, when news circulated that top management had entered into secret derivatives contracts with Deutsche Bank and Nomura in order to hide estimated losses of between 500 million euros and 750 million euros in two of its divisions.
    MPS has also been at the center of a judicial investigation into its acquisition of smaller rival Antonveneta in 2008 as well as the derivatives trades the bank allegedly used to conceal losses.
    Former chairman Giuseppe Mussari and former director general Antonio Vigni, who left in early 2012, are both under investigation on allegations of market manipulation, false statements to the market and regulatory obstruction in relation to the Antonveneta deal and the derivatives trades.


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