Monte dei Paschi posts losses of €4.7bn

Banca Monte dei Paschi di Siena, Italy’s third largest banking group, posted losses €4.69bn for 2011. The losses are bigger than expected, and will entail asset disposals and staff cuts.

A Thomson Reuters I/B/E/S analyst consensus had forecast a net loss of €2.1bn. Monte dei Paschi said that the bank, which also reported a 1.2% fall in revenues, would not pay a dividend on 2011 results. The bank said its Core Tier 1 ratio stood at 8.5%, excluding €1.9bn of state-backed bonds it took in 2009 to bolster its capital.

The group’s director general Fabrizio Viola is putting the bank though a restructuring process that includes asset disposals and staff cost cuts. Former UniCredit boss Alessandro Profumo will be formally appointed chairman in April.

The group’s shareholder structure also faces unprecedented changes. The bank’s controlling shareholder, the Fondazione Monte dei Paschi, is having to sell off part its stake to pay off big debts.

However, it is aiming to retain control of the bank, and prevent it falling into the hands of foreign bidders. The foundation has sold an 8.2% stake, including 4% to Tuscan-based entrepreneurs, cutting its holding in the lender to around 41%. It is looking to sell up to 7% more.

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