Crisis-stricken Italian bank Monte dei Paschi in Siena is looking for help. A capital increase and cost reductions are intended to make it fit for privatization. Another crisis-ridden bank is part of the plan.
Credit Suisse, together with the Italian state, Bank of America, Citigroup, and Mediobanca, are participating in a capital increase amounting to 2.5 billion euros for long-troubled Siena-based Italian bank Monte de Paschi, the world's oldest. As the largest owner, the Italian state will chip in just under two-thirds of the total, according to a report in the German newspaper «FAZ».
The Italian government has long wanted to sell its stake in the world's oldest bank, but again has to resort to injecting taxpayer money after a Unicredit, a prospective buyer backed out of the deal last year.
For the latest strategic plan and the capital increase to take effect, it still needs the go-head from the European Commission, which is expected soon. Part of the plan is to cut 4,000 of the total staff of 21,000 and close 12 percent of all branches.
With one troubled bank helping another, perhaps misery really does love company.
