January 24, 2019 / 12:28 PM / 6 months ago

DAVOS-Italy working to exit Monte dei Paschi as agreed with EU -finmin

DAVOS, Switzerland, Jan 24 (Reuters) - The Italian government is working on selling its stake in troubled bank Monte dei Paschi di Siena as agreed with the European Commission, Economy Minister Giovanni Tria said on Thursday.

The government owns 68 percent of Monte dei Paschi as a result of a 2017 bailout. Under the deal with the EU it needs to present its plans this year for offloading its holding.

However, Monte dei Paschi (MPS) is still battling with high bad loan ratios and faces legal claims for more than 1.5 billion euros ($1.7 billion), making it risky for peers to take over without any support from the state.

“On MPS we are considering all the possible solutions but for now the route is that agreed with the EU,” Tria told journalists on the sidelines of the World Economic Forum in the Swiss town of Davos.

“Other options will be examined in the future if and when there are any problems,” he also said.

Reuters reported this month that Rome was considering merging Monte dei Paschi with healthier rivals such as UBI Banca .

Any additional state aid would attract the scrutiny of European authorities and mark a U-turn for Italy’s ruling coalition, which was critical of past decisions to use taxpayer money to prop up banks. ($1 = 0.8812 euros) (Reporting by Giselda Vagnoni, editing by Gavin Jones and Susan Fenton)

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