The world’s oldest bank to cut 4,000 jobs, raise €2.5 billion

Banca Monte dei Paschi di Siena SpA in Italy said on Thursday it would raise up to 2.5 billion euros ($ 2.64 billion), cut thousands of jobs and close dozens of branches as part of its multi-year plan to renew your balance sheet, turning page after page. chapter that saw the lender suffer a recapitalization of the state and the elimination of billions in bad loans.

The world’s oldest bank said it would aim to reduce approximately 4,000 jobs through a voluntary exit plan, a measure Monte Monte Paschi expects to save 270 million euros a year from 2023 with one-off restructuring costs of about 800 million euros. It will also close about 150 offices, bringing its network to just over 1,200 offices.

Monte dei Paschi BMPS,
will seek shareholder approval for the capital increase at an extraordinary general meeting to be held in late September to raise funds by the end of the year.

“Today, our bank begins a new chapter, renewing its path of development and with the aim of achieving a solid level of capital, maintaining its own identity and taking advantage of its unique history,” said the president of Monte dei Paschi, Patrizia Grieco.

Monte dei Paschi has long been plagued by a large number of bad loans and a legal scandal. After the bank was on the verge of bankruptcy, Rome spent about 5.4 billion euros to nationalize it in 2017, the equivalent of more than $ 6 billion at the time.

Monte dei Paschi said that the Italian government, the controlling shareholder of the bank with a 64.23% stake, is completely behind its plan until 2026.

The bank said it would create three new divisions, namely retailers and SMEs, large companies and investment banking, as it seeks to simplify its structure. It will also establish a cost governance unit, another premium customer-focused unit for wealth management and another for consumer financing.

The new plan should allow the bank to return 30% of its net profit by 2025 and 2026 to shareholders, he said.

Write to Mauro Orru at; @ MauroOrru94

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