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Morelli, the 54-year-old former Italy head of Bank of America
Merrill Lynch <BAC.N>, took over as CEO of the country's
third-largest bank in mid-September, charged with winning
investor support for a 5 billion euro ($5.4 billion) fundraising
plan.
Drawn up with the help of adviser JPMorgan <JPM.N>, the plan
also envisages the sale of 28 billion euros in bad loans to keep
the bank afloat after it emerged as the weakest lender in Europe
in the latest round of industry stress tests over the summer.
"The key planks of the rescue plan should not change much,"
broker ICBPI said in a note. "We expect a smaller cash call ...
thanks to an at least partial conversion of subordinated debt."
Some investors are skeptical over the Tuscan bank's ability to
carry out a third share issue in as many years at a time when
banking stocks trade at a fraction of their book value as
negative interest rates eat into profits.
In a further complication, a referendum vote on Italy's
constitutional reform on Dec. 4 risks undermining the government
of Prime Minister Matteo Renzi, making investors reluctant to
commit until the outcome is known.
Shares in Monte dei Paschi are down 75 percent year-to-date
despite a similar-sized rebound over the past week, triggered by
the emergence of an alternative rescue package brokered by
veteran Italian banker and former industry minister Corrado
Passera.
Passera's proposal involves a 2.5 billion euro capital increase
reserved for private equity funds including Warburg Pincus and a
1 billion euro share sale to existing Monte dei Paschi
investors.
By 0454 EDT shares in Monte dei Paschi were up 11.5 percent.
($1 = 0.9190 euros)
(Reporting by Valentina Za; Editing by David Holmes)
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