The Italian MP will present his capital plan to the ECB, the Ukrainian crisis could weigh


View of the entrance to the headquarters of Monte dei Paschi di Siena (MPS), the world’s oldest bank, which is facing massive layoffs in a planned corporate merger, in Siena, Italy, on 11 August 2021. REUTERS/Jennifer Lorenzini

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MILAN, March 22 (Reuters) – Monte dei Paschi di Siena (BMPS.MI) must submit an updated capital plan to the European Central Bank by the end of March, the Italian public bank said in a document, warning against the Ukrainian crisis. could affect its cash requirements.

In its 2021 financial report published on its website, MPS said the war could lead it to revise a multi-year strategic plan that currently envisages a capital boost of 2.5 billion euros ($2.8 billion). .

In a letter dated January 14, the ECB expressed its expectations for the plan, asking for details and indicating that it would be subject to quarterly monitoring, the MPS said.

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Although its direct exposure to Russia and Ukraine is low, MPS said it could suffer if Italy’s economy weakens as a result of the war, which is driving up energy and fuel costs. raw materials for business.

The quality of its loan portfolio has always been the Achilles heel of the Tuscan lender that the government had to rescue in 2017 at the cost of 5.4 billion euros for taxpayers.

The MPS said the ECB had also requested by March 31 a three-year plan detailing its strategy for dealing with bad loans.

MPS, 64% owned by the Treasury after the bailout five years ago, named Luigi Lovaglio, restructuring expert and veteran UniCredit executive (CRDI.MI), as its new chief executive in February. Read more

Lovaglio, who took over after the Treasury expelled his predecessor Guido Bastianini, will present his first results in early May.

Bucking the industry trend, MPS posted a fourth quarter loss impacted by an increase in loan loss provisions.

After failing to sell MPS to rival UniCredit last year, the Treasury is preparing to inject more money into it.

The proposed share issue will also require the contribution of private investors in order to avoid breaching European Union rules on state aid to banks. ($1 = 0.9074 euros)

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Reporting by Valentina Za, editing by Keith Weir

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