MILAN (Reuters) - Italy’s economy minister said on Monday that nationalising troubled Italian banks was not necessary, as concerns mounted that a plan to rescue lender Banca Monte dei Paschi di Siena (BMPS.MI) might come unstuck.
Answering a question on whether nationalising banks in crisis would be a drama, Pier Carlo Padoan, said: “I don’t see the need (for nationalisation).”
Monte dei Paschi has agreed a new turnaround plan based on a 5-billion-euro ($5.6 billion) cash call and the sale of 28 billion of bad loans, but investors’ appetite is in doubt as markets fret over political uncertainty and a Dec. 4 referendum.
Last month, the bank appointed the former Italy head of Bank of America Merrill Lynch (BAC.N), Marco Morelli, as its new chief executive last month to drum up support for the plan.
The share sale is the bank’s third recapitalisation in as many years and investors are growing increasingly worried the lender may have to turn to the government for support.
“At this moment the bank is preparing an overall plan that I think is a good one,” Padoan said in a video-conferenced interview from Rome.
He denied the government played any “intrusive” role in the appointment of Morelli, pointing out the bank’s board had voted unanimously for him.
The government is Monte dei Paschi’s leading shareholder with a stake of about 4 percent.
“There won’t be any alternative plans but an offer to the market that I am convinced will be a success,” Padoan said.
The Tuscan bank emerged as the weakest lender in Europe-wide stress tests in 2014 and again in July and the government of Prime Minister Matteo Renzi has made helping it a priority.
Reporting by Elvira Pollina; Writing by Stephen Jewkes; Editing by Louise Ireland