Monte dei Paschi reduces legal claims to 4.9 billion euros – slide

MILAN, Aug.6 (Reuters) – Italian bank Banca Monte dei Paschi di Siena (MPS) (BMPS.MI) further reduced its legal claims to 4.9 billion euros ($ 5.8 billion), showed a slide on the Tuscan bank’s website, marking a new step in Rome’s efforts to re-privatize the ailing lender.

MPS initially faced some € 10 billion in legal risks, seen as one of the main obstacles to the Italian Treasury’s plan to reduce its 64% stake in the bank by mid-2022, as agreed in as part of a state rescue plan in 2017.

MPS’s board on Thursday approved a settlement agreement with the bank’s former main investor, local banking foundation Fondazione Monte dei Paschi, reducing risk by € 3.8 billion.

According to the slide, the legal risks of Monte dei Paschi amounted to 4.9 billion euros as of June 30, of which 2.2 billion euros were classified as probable and for which 1 billion euros of provisions had been counted.

The Treasury has been pushing to offload MPS onto its healthier rival UniCredit (CRDI.MI) and the parties have agreed to start exclusive talks on the bank bailed out last week. Read more

Under the conditions set by UniCredit to start negotiations, the Milanese bank will be sheltered from any extraordinary legal risk weighing on MPS after years of mismanagement.

Reuters had reported that the Treasury was working to cut MPS’s legal risks by more than half. Read more

($ 1 = € 0.8457)

Reporting by Agnieszka Flak; edited by Valentina Za

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