email

Get the daily email about stock.

Please Enter Your Email Address:

By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Bull Trader USA

Dow Jones Newswires: The world’s oldest bank to cut 4,000 jobs, raise €2.5 billion

Italy’s Banca Monte dei Paschi di Siena SpA said Thursday that it would raise up to 2.5 billion euros ($2.64 billion), slash thousands of jobs and close dozens of branches as part of its multiyear plan to revamp its balance sheet, turning a page on a chapter that saw the lender undergo state recapitalization and the disposal of billions in bad loans.

The world’s oldest bank said that it would aim to cut roughly 4,000 jobs through a voluntary exit scheme, a move Monte dei Paschi expects will create EUR270 million in savings a year from 2023 against one-off restructuring costs of about EUR800 million. It will also close some 150 branches, bringing its network to just over 1,200 branches.

Monte dei Paschi
BMPS,
-2.41%

will seek shareholders’ approval for the capital increase at an extraordinary general meeting to be held by the end of September to raise the funds by the end of the year.

“Today our bank starts a new chapter, revamping its development path and aiming to reach a robust capital level, while keeping its own identity and leveraging on its unique history,” Monte dei Paschi Chairwoman Patrizia Grieco said.

Monte dei Paschi has long been weighed down by a vast number of bad loans and a legal scandal. After the bank teetered near failure, Rome spent some EUR5.4 billion to nationalize it in 2017, equivalent to more than $6 billion at the time.

Monte dei Paschi said the Italian government, the bank’s controlling shareholder with a stake of 64.23%, is fully behind its plan through 2026.

The bank said it will create three new divisions, namely retail & SME, large corporate and investment banking, as it seeks to simplify its structure. It will also set up a cost governance unit, another unit focusing on premium clients for wealth management, and one for consumer finance.

The new plan should allow the bank to return 30% of its net profit for 2025 and 2026 to shareholders, it said.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

Post a Comment