Italy weighs M&A solutions for Monte dei Paschi, Carige - sources
Posted on Friday January 18, 2019

Italy is considering merging troubled banks Monte dei Paschi (BMPS.MI) and Banca Carige (CRGI.MI) with healthier rivals such as UBI Banca (UBI.MI) as it scrambles to avert a new banking crisis, sources familiar with the matter said. Monte dei Paschi, rescued by the state in 2017, and Carige, recently put into special administration by the European Central Bank (ECB), are struggling with bad debts and the prospect of asset writedowns that would eat into their capital. According to one of the sources, the options being considered even include the possibility of a three-way merger that would bring together Monte dei Paschi, Carige and UBI.

ECB's guidelines on bad debts hit Italian banks, irk Rome
Posted on Tuesday January 15, 2019

The ECB will set a target date for each of the banks it supervises to make a full provision for its bad debts, both existing and new, a source familiar with the matter said. The date may differ from bank to bank and will be an expectation for the medium term rather than a binding requirement, the source added, confirming a report in Italian newspaper Il Sole 24 Ore. The ECB declined to comment.

Italy's Salvini accuses ECB of damaging local banks
Posted on Tuesday January 15, 2019

Deputy Prime Minister Matteo Salvini on Tuesday accused the European Central Bank of attacking Italy's banking system, saying its request for local lenders to put aside more money to cover impaired loans could cost the country 15 billion euros (13.34 billion pounds). Salvini, who heads the far-right League, said in a statement that the ECB move showed that the EU's banking union was creating instability and said more transparency was needed to dispel any suspicion the central bank was politically motivated. Earlier on Tuesday, a source told Reuters the ECB would give the banks it supervises a target date to fully provision for all of their bad debt, existing and new.

Monte dei Paschi shares suspended after plunging on ECB warning
Posted on Monday January 14, 2019

Shares in Monte dei Paschi di Siena (BMPS.MI) were suspended on Monday after sliding by 8.5 percent on news of a stark European Central Bank warning for the Italian bank. The ECB had flagged funding and profitability risks as well as a weakened capital position in a letter to Monte dei Paschi, the bailed-out lender revealed late on Friday. Monte dei Paschi said the ECB had told it to put aside more money to cover impaired loans by 2026, in line with rules requiring euro zone banks to perform full writedowns within seven years for new loans that turn sour after April 2018.