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The
Treasury late last year refused to meet terms set by Italy's
second-biggest bank UniCredit to agree to an acquisition of its
ailing rival, in a setback for Rome's re-privatisation plans.
The collapse of talks with UniCredit has prompted the Treasury
to seek an extension of an end-2021 deadline to return MPS into
private hands.
Italy is currently discussing with European Union competition
authorities a new restructuring plan for MPS and a new deadline
which sources have told Reuters will be past 2023.
In the meantime, however, MPS must raise cash by selling new
shares to bolster its capital reserves after emerging as the
most vulnerable euro zone lender in last summer's industry
stress tests run by European banking supervisors.
The sources said the Treasury had stepped up pressure on MPS CEO
Guido Bastianini to quit after the failure of the UniCredit
negotiations.
The sources said Bastianini had been informed earlier this month
of the Treasury's intentions, but was resisting pressure to step
down. MPS declined to comment. The Treasury did not reply to
several requests for comment.
By 0938 GMT shares in MPS gained 1% underperforming a 1.7% rise
in Italy's banking index.
MPS, which is Italy's fourth-largest bank, has said it has plans
to raise 2.5 billion euros from a new share sale this year.
Italy, which rescued MPS in 2017 at a cost to taxpayers of 5.4
billion euros, will pump more money into it under the cash call,
but EU rules on state aid for banks require MPS also to secure a
contribution from private investors.
Deemed too big to be wound down by regulators, MPS has been for
years at the fore of Italy's banking crisis.
(Reporting by Giuseppe Fonte in Rome and Valentina Za in Milan;
Editing by Daniel Wallis and Louise Heavens)
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