The European Central Bank sees Italian lender Banca Monte dei Paschi di Siena SpA needing about 8.8 billion euros ($9.2 billion) of capital to bolster its balance sheet, according to Bloomberg.
The calculation is based on the results of a 2016 stress test, the bank said in a statement late Monday, citing two letters from the ECB that it received via Italy’s Finance Ministry. While the ECB saw worsening liquidity at Monte Paschi in December, it still considers the Italian bank to be solvent because it meets Tier 2 capital requirements. Paschi is seeking further information on the central bank’s calculations, according to the statement.
On Friday, the Italian government said it will plow as much as 20 billion euros into Monte Paschi and other banks after the lender failed in its plan to raise about 5 billion euros from private investors. Chief Executive Officer Marco Morelli had crisscrossed the globe looking for investors to back the bank’s reorganization plan, which included a share sale, a debt-for-equity swap and the sale of 28 billion of soured loans.
Il Sole/24 Ore reported Tuesday that the Italian government will invest 6.3 billion euros n the bank, after the newspaper said Monday that the European Central Bank had called for a 4.5 billion-euro contribution from the Italian state and 4.3 billion euros from bondholders.
