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RPT-UPDATE 2-Italy set to take stake in Monte dei Paschi - source
February 12, 2015 / 9:32 AM / 3 years ago

RPT-UPDATE 2-Italy set to take stake in Monte dei Paschi - source

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By Stefano Bernabei

ROME, Feb 12 (Reuters) - The Italian treasury will take a stake in the country’s troubled lender, Monte dei Paschi di Siena, as the bank will pay a coupon on state loans in shares because it ended the year with a loss, a treasury source told Reuters.

Monte dei Paschi on Wednesday reported a loss of 5.34 billion euros ($6.07 billion) for 2014. Under the terms of state loans it received in 2013, if the bank does not report a profit, it has to pay the annual coupon on the loans with new shares.

The source said the rules meant the treasury would take a stake in the bank when the coupon is paid in July.

According to an estimate by broker Equita, at current market prices the treasury would end up with a stake of around 10 percent in the lender after receiving the 2014 coupon of 243 million euros in shares.

The treasury stake would be around 5 percent after the bank completes a planned 3 billion euro capital increase.

The bank increased the size of the rights issue from 2.5 billion euros to meet tough capital targets set by the European Central Bank after reporting its fourth consecutive annual loss.

The bank received 4.1 billion euros in state loans in 2013. It reimbursed 3 billion euros of those loans in July last year.

The bank’s shares opened lower on Thursday, weighed down by the higher-than-expected loss for 2014 and the increase in the size of the rights issue, but later recovered and were up 1.3 percent by 1340 GMT.

$1 = 0.8800 euros Reporting by Stefano Bernabei; Writing by Silvia Aloisi; Editing by Paola Arosio and Mark Potter

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