Sunday, February 10, 2013

Monte Paschi expects state aid very soon

BERGAMO, Italy (Reuters) - Italy's troubled lender Monte dei Paschi expects to receive 3.9 billion euros ($5.2 billion) in state loans in a "very short time", Chairman Alessandro Profumo said on Saturday.

The funds, being provided through special bonds, are designed to shore up Italy's third largest bank, which has been at the centre of a financial and political storm over losses resulting from derivatives and structured finance trades.

"The bank will sign the 'Monti bond' in a very short time," said Profumo, talking with journalists on the sidelines of a business conference.

He gave no specific time frame and the European Commission still has to give its green light to the arrangement.

Monte Paschi Chief Executive Fabrizio Viola said the bank was currently not in talks with counterparts to restructure - "Santorini" and "Alexandria" - two of the derivatives trades at the heart of a fraud probe into the former management.

"We will evaluate what to do in the framework of the ordinary management of the bank," he said.

The bank said on Wednesday that losses linked to three problematic derivative trades, including "Santorini" and "Alexandria", totaled 730 million euros as it sought to draw a line under a scandal over risky financial transactions.

The executives confirmed the current business plan, but Viola said the European Commission could ask for changes as it considers whether to agree to the state loans.

(Reporting by Francesca Landini and Gianluca Semeraro; editing by Matthew Tostevin)

Source: http://news.yahoo.com/monte-paschi-sign-state-aid-very-short-time-092824595--finance.html

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