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View of the logo of Monte dei Paschi di Siena (MPS), the world’s oldest bank, facing massive layoffs as part of a proposed company merger, in Siena, Italy. REUTERS / Jennifer Lorenzini
Four years after spending 5.4 billion euros ($ 6.3 billion) to save it, Rome is in talks to sell Monte dei Paschi (BMPS.MI) to UniCredit (CRDI.MI) and cut its stake from 64% in the Tuscan bank, writes Valentina Za, Reuters.
Here is a timeline of key events in the recent history of Monte dei Paschi (MPS), which made it the epitome of Italy’s banking nightmare.
NOVEMBER 2007 – MPS acquires Antonveneta in Santander (SAN.MC) for 9 billion euros in cash, just months after the Spanish bank paid 6.6 billion euros to the Italian regional lender.
JANUARY 2008 – MPS announces a capital increase of 5 billion euros, a 1 billion euros convertible financial instrument called Fresh 2008, 2 billion euros of subordinated hybrid capital bonds and a bridging loan of 1.95 billion euros to finance the Antonveneta operation.
MARCH 2008 – The Bank of Italy, headed by Mario Draghi, approves the takeover of Antonveneta subject to the reconstitution of the capital of MPS.
MARCH 2009 – MPS sells 1.9 billion euros of special bonds to the Italian Treasury to consolidate its finances.
JULY 2011 – MPS raises 2.15 billion euros in rights issue ahead of European stress test results.
SEPTEMBER 2011 – The Bank of Italy is providing € 6 billion in emergency liquidity to MPS via repo operations as the eurozone sovereign debt crisis worsens.
DECEMBER 2011 – The European Banking Authority fixes MPS’s capital shortfall at 3.267 billion euros as part of a general recommendation to 71 lenders to increase their capital reserves.
FEBRUARY 2012 – MPS reduces its capital requirements by € 1bn by converting hybrid capital instruments into shares.
MARCH 2012 – MPS posted a loss of 4.7 billion euros in 2011 after billions of goodwill write-downs on transactions including Antonveneta.
MAY 2012 – Italian police raided MPS headquarters as prosecutors investigate whether this misled regulators about the Antonveneta acquisition.
JUNE 2012 – MPS says it needs € 1.3 billion in capital to comply with the EBA recommendation.
JUNE 2012 – MPS asks the Italian Treasury to subscribe up to an additional € 2 billion in special bonds.
OCTOBER 2012 – Shareholders approve a € 1 billion capital increase intended for new investors.
FEBRUARY 2013 – MPS reports that the losses resulting from three 2006-09 derivative transactions amount to € 730 million.
MARCH 2013 – MPS lost 3.17 billion euros in 2012, penalized by the fall in the prices of its important Italian government bonds.
MARCH 2014 – MPS posted a 2013 net loss of € 1.44 billion.
JUNE 2014 – MPS raises € 5bn as part of a strongly discounted capital increase and repays € 3.1bn to the State.
OCTOBER 2014 – MPS appears to be the worst performing in stress tests at European level with a capital deficit of 2.1 billion euros.
OCTOBER 2014 – Former MPS Chairman, CEO and CFO is sentenced to three and a half years in prison after being found guilty of misleading regulators.
NOVEMBER 2014 – MPS plans to raise up to € 2.5 billion after stress test results.
JUNE 2015 – MPS raises 3 billion euros in cash after increasing the amount of its capital increase after recording a net loss of 5.3 billion euros for 2014 on record impairments of bad debts. It reimburses the remaining 1.1 billion euros of the special obligation subscribed by the State.
JULY 2016 – MPS announces new rights issue of 5 billion euros and plans to get rid of 28 billion euros of bad debt, as stress tests of European banks show it would have negative equity in the event crisis.
DECEMBER 2016 – MPS seeks state aid as part of a preventive recapitalization plan after the failure of its cash call. The ECB sets the bank’s capital requirements at 8.8 billion euros.
JULY 2017 – After the ECB declared MPS solvent, the European Commission clears the bailout at a cost of € 5.4 billion to the state in exchange for a 68% stake. Private investors contribute € 2.8 billion for a total of € 8.2 billion.
FEBRUARY 2018 – MPS posts profits in 2018, but says its updated projections fall short of restructuring targets agreed by the EU.
OCTOBER 2018 – MPS concludes the largest bad debt securitization transaction in Europe, eliminating € 24 billion of bad debt.
FEBRUARY 2020 – MPS posts a 2019 loss of € 1bn.
MAY 2020 – CEO Marco Morelli resigns urging Rome to find a partner for MPS as soon as possible. He is replaced by Guido Bastianini supported by 5 stars.
AOT 2020 – Italy is setting aside € 1.5 billion to help MPS as it strives to meet the mid-2022 reprivatization deadline.
OCTOBER 2020 – MPS shareholders approve a state-sponsored plan to reduce bad loans to 4.3% of total loans. Italy’s stake drops to 64% as a decree paves the way for its sale.
OCTOBER 2020 – A Milan court sentences the former CEO and chairman of MPS for false accounting in a surprise decision that forces MPS to increase provisions for legal risks.
DECEMBER 2020 – MPS says it needs up to € 2.5 billion in capital.
DECEMBER 2020 – Italy approves tax incentives for bank mergers resulting in € 2.3 billion advantage for MPS buyer.
JANUARY 2021 – MPS says it opens its books to potential partners.
FEBRUARY 2021 – MPS posts a loss of € 1.69 billion for 2020.
APRIL 2021 – Andrea Orcel takes over as director of UniCredit.
JULY 2021 – UniCredit begins exclusive talks with Italy’s Treasury to buy “selected parts” of MPS, a day before European bank stress test results show the smaller bank’s capital would be wiped out in a collapse.
($ 1 = € 0.8527)