Monte dei Paschi a goal of fixed profit 2021
* Jobs and branches are part of the restructuring
* The EU approves the bailout of the state, while Italy is tackling the banking crisis (details, he adds, conference call quotes, Constantius on paper)
By Stephen Jewkes and Agnieszka Flak
Milan, July 5 (Reuters) – Italian bank Monte dei Paschi di Siena plans to launch the “emergency room” and reap profits, paving the way for a state bailout that should eliminate most of the threat to stability Financial.
The world’s oldest bank said on Wednesday it expects to report a net gain of more than 1.2 billion euros ($ 1.4 billion) in 2021 as part of a restructuring plan approved by European authorities.
Last year, there was a net loss of 3.24 billion euros.
“This is a conservative plan. We are not based on unrealistic goals,” CEO Marco Morelli said at a press conference to present the new plan.
Morelli said mergers were not foreseen at the time. “There is no plan B on the table,” he said.
Success in impaired loans and mismanagement Monte Paschi scandal for years has been at the forefront of the cheap bank crisis in Italy.
He was forced to apply for state aid in December after his attempt to get private equity investors failed.
On Tuesday, the European Union approved a rescue plan of 5.4 billion euros in the fourth Italian lender after the bank accepted a drastic revision in a move that will leave Rome to hold about 70% of the bank.
“What we have experienced over the past nine months is almost unknown: it’s like an emergency department with an emergency every five minutes,” Morelli said.
Italy has pledged more than 20 billion euros of taxpayers’ money in the space of a week to save three of its banks, but the country’s largest financial sector still weighs about 300 billion euros past due portfolio (NPL).
Path to profit
In its 2017-2021 plan Monte dei Paschi sees a return on capital of more than 10 percent in 2021, a staff reduction of around 5500 and a smaller number of branches from around 1400 to about 2,000 in 2016 As it aims to ensure the lender is profitable in the long run.
The bank will sell € 28.6 billion of doubtful loans, € 26.1 billion of which are secured through a transfer to a special vehicle for private capital in the market, with the operation partly financed by The Atlante II bank bailout fund.
Its CET1 ratio, a measure of economic capacity, is expected to reach 14.7% in 2021, he added.
Morelli said that 5.5 billion euros of deposits were recovered in the first quarter, adding that “liquidity is not a problem.”
Policymakers now want Italy to offer a solution to tackle delinquency and without the need for more government money to support its besieged banking sector.
European Central Bank Vice President Vitor Constancio said on Wednesday that it was necessary to act swiftly to establish a more robust secondary market in Europe for loans and unprofitable policy changes to encourage banks, investors and authorities to deal with The problem.