ROME- On Sunday, Italy along with the agreement of the European Union Commission intends to delay the presentation of a plan to sell its Monte dei Paschi di Siena stake to early 2020 as the bank struggles to shed bad loans, said the Treasury.
By the end of this year, the state’s plan to offload the 68% stake in the oldest bank in the world by 2021 end was to be submitted to the EU executive.
In a statement by the Treasury, it states that it had asked Brussels to postpone the decision in light of the dialogue regarding the de-risking operation for the bank.
Monte Paschi has been at the forefront of the banking crisis in Italy until the 2017 Brussels cleared state bailout. This left the bank with a tough plan for restructuring and the main shareholder became the Italian Treasury.
Since the bailout, the bank has sold over 30 billion euros of bad loans but still held 16 million in soured debt halfway through this year which amounts for 16% of its total loans.
This came in the path of a merger with a rival and complicated the re-privatisation efforts from the part of the Treasury.
Italy has been in talks with Brussels for months over a plan to accelerate the disposal of Monte Paschi’s soured loans.
The Treasury’s plan would see a chunk of the bank’s assets and liabilities transferred to state-owned bad loan manager AMCO, but the Commission is concerned that it may break EU state aid rules.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field.
