Italy’s Mps approves tight restructuring plan

Banca Monte dei Paschi di Siena (Mps) has committed to reducing the number of employees by approximately 8,000, leading to a personnel cost cut of €500m by 2017.

The 2013-2017 Restructuring Plan entails a series of actions aimed at restoring a level of profitability that is in line with the cost of capital and sustainable over time as well as fully strengthening the asset structure, capital and liquidity of the bank, Mps said.

To relaunch the bank’s productivity,Mps said it will aim at relaunching the private banking sector with a focus on HNW customers, reinforcing bancassurance activities and launching the online bank project (Widiba).

Apart from cutting personnel by approximately 8,000 units, Mps has committed to reducing administrative costs by around €440m between 2011-2017.

Further cuts of €300m, will be delivered through full implementation of the 170 actions undertaken/in progress in 2013, the closure of an additional 15 branches, in addition to the 400 previously closed by the bank.

Remuneration of top managers has also emerged as one of the crucial areas of the plan. Mps has commited to respecting the maximum remuneration limit

Finally, Mps said it will be looking at reducing the portfolio of Italian government bonds classified as available for sale from €23bn in June 2013 to a nominal value of approxiamtely €17bn in 2017, with interest rates risk
largely covered by hedging.

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