Italian lender Monte dei Paschi di Siena (MPS) is mulling to raise €2.5bn ($2.6bn) to support a new recovery plan, reported Reuters.
The new plan to 2026 for the troubled lender seeks to reduce costs, recapitalise the bank and trim workforce to change fortunes.
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MPS CEO Luigi Lovaglio was quoted by the news agency as saying: “I’m here to attempt to solve a problem. I think we’re on the right track to solve the MPS problem, hence to solve a problem for taxpayers.”
The bank is 64% owned by the government. A previous plan to sell MPS to UniCredit did not materialise.
The Italian government subsequently sought an extension to the 2021-end-deadline to privatise the bank.
Lovaglio expects that the government will soon reach a new understanding on a new deadline with the EU authorities.
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By GlobalDataUnder the new plan, MPS will close 11% of its branches and trim its workforce by 4,200 people.
MPS said that the redundancies will be voluntary and will cost the company €800m.
The steps will help the lender to reduce costs.
Additionally, MPS plans to simplify bank’s structure by merging other units MPS Capital Services, MPS Leasing & Factoring and the IT services unit into the group.
It will also look to sell a bad loan portfolio of €1.3bn.
Over the plan’s life to 2026, MPS aims to register an average revenue growth of 2% annually.
Dividend payments are expected to commence from 2025.
