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Timeline: Decline and near fall of Italy's Monte dei Paschi, the world's oldest bank

08/13/2021 | 04:14am EDT
Italy's problem bank casts a long shadow over Draghi's summer break

MILAN (Reuters) - Four years after spending 5.4 billion euros ($6.3 billion) to rescue it, Rome is in talks to sell Monte dei Paschi to UniCredit and cut its 64% stake in the Tuscan bank.

Here is a timeline of key events in the recent history of Monte dei Paschi (MPS), which have made it the epitome of Italy's banking nightmare.

NOVEMBER 2007 - MPS buys Antonveneta from Santander for 9 billion euros in cash, just months after the Spanish bank paid 6.6 billion euros for the Italian regional lender.

JANUARY 2008 - MPS announces a 5 billion euros rights issue, a 1 billion euro convertible financial instrument called Fresh 2008, 2 billion euros in subordinated, hybrid capital bonds and a 1.95 billion euro bridge loan to fund the Antonveneta deal.

MARCH 2008 - The Bank of Italy, led by Mario Draghi, approves the Antonveneta takeover subject to MPS rebuilding its capital.

MARCH 2009 - MPS sells 1.9 billion euros in special bonds to Italy's Treasury to shore up its finances.

JULY 2011 - MPS raises 2.15 billion euros in a rights issue ahead of European stress test results.

SEPTEMBER 2011 - The Bank of Italy provides 6 billion euros in emergency liquidity to MPS through repo deals as the euro zone sovereign debt crisis escalates.

DECEMBER 2011 - The European Banking Authority sets MPS' capital shortfall at 3.267 billion euros as part of a general recommendation to 71 lenders to boost their capital reserves.

FEBRUARY 2012 - MPS cuts its capital needs by 1 billion euros by converting hybrid capital instruments into shares.

MARCH 2012 - MPS posts a 4.7 billion euro 2011 loss after billions of goodwill writedowns on deals including Antonveneta.

MAY 2012 - Italian police search MPS headquarters as prosecutors investigate whether it misled regulators over the Antonveneta acquisition.

JUNE 2012 - MPS says it needs 1.3 billion euros in capital to comply with EBA's recommendation.

JUNE 2012 - MPS asks Italy's Treasury to underwrite up to another 2 billion euros in special bonds.

OCTOBER 2012 - Shareholders approve a 1 billion euro share issue aimed at new investors.

FEBRUARY 2013 - MPS says losses stemming from three 2006-09 derivatives trades amount to 730 million euros.

MARCH 2013 - MPS loses 3.17 billion euros in 2012, hit by plunging prices on its large Italian government bond holdings.

MARCH 2014 - MPS posts 2013 net loss of 1.44 billion euros.

JUNE 2014 - MPS raises 5 billion euros in a deeply discounted rights issue and repays the state 3.1 billion euros.

OCTOBER 2014 - MPS emerges as the worst performer in Europe-wide stress tests with a capital shortfall of 2.1 billion euros.

OCTOBER 2014 - The former MPS chairman, chief executive and finance chief are sentenced to three-and-a-half years in jail after being found guilty of misleading regulators.

NOVEMBER 2014 - MPS plans to raise up to 2.5 billion euros after stress tests results.

JUNE 2015 - MPS raises 3 billion euros in cash having upped the size of its rights issue after posting a 5.3 billion euro net loss for 2014 on record bad loan writedowns. It repays the remaining 1.1 billion euro state underwritten special bond.

JULY 2016 - MPS announces a new 5 billion euro rights issue and plans to offload 28 billion euros in bad loans as European bank stress tests show it would have negative equity in a slump.

DECEMBER 2016 - MPS turns to the state for help under a precautionary recapitalisation scheme after its cash call fails. The ECB sets the bank's capital needs at 8.8 billion euros.

JULY 2017 - After the ECB declares MPS solvent, the EU Commission clears the bailout at a cost of 5.4 billion euros for the state in return for a 68% stake. Private investors contribute 2.8 billion euros for a total of 8.2 billion.

FEBRUARY 2018 - MPS swings to profit in 2018 but says its updated projections are below EU agreed restructuring targets.

OCTOBER 2018 - MPS completes Europe's biggest bad loan securitisation deal, shedding 24 billion euros in bad debts.

FEBRUARY 2020 - MPS posts 1 billion euro 2019 loss.

MAY 2020 - CEO Marco Morelli steps down urging Rome to secure a partner for MPS as soon as possible. He is replaced by 5-Star backed Guido Bastianini.

AUGUST 2020 - Italy sets aside 1.5 billion euros to help MPS as it works to meet a mid-2022 re-privatisation deadline.

OCTOBER 2020 - MPS shareholders approve a state-sponsored plan to cut soured loans to 4.3% of total lending. Italy's stake falls to 64% as a decree paves the way for its sale.

OCTOBER 2020 - A Milan court convicts MPS' former CEO and chairman for false accounting in a surprise decision that forces MPS to boost legal risk provisions.

DECEMBER 2020 - MPS says it needs up to 2.5 billion euros in capital.

DECEMBER 2020 - Italy approves tax incentives for bank mergers entailing a 2.3 billion euro benefit for an MPS buyer.

JANUARY 2021 - MPS says to open its books to potential partners.

FEBRUARY 2021 - MPS posts 1.69 billion euro loss for 2020.

APRIL 2021 - Andrea Orcel takes over as UniCredit CEO.

JULY 2021 - UniCredit enters exclusive talks with Italy's Treasury to buy "selected parts" of MPS, a day before European banking stress test results show the smaller bank's capital would be wiped out in a slump.

($1 = 0.8527 euros)

(Reporting by Valentina Za; Editing by Alexander Smith)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.16% 0.6674 Delayed Quote.4.59%
BANCA MONTE DEI PASCHI DI SIENA S.P.A. 0.00% 0.707 Delayed Quote.-20.74%
BANCO SANTANDER, S.A. 0.63% 2.795 Delayed Quote.-5.53%
BRITISH POUND / EURO (GBP/EUR) -0.32% 1.17954 Delayed Quote.-0.77%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.11% 0.741191 Delayed Quote.7.05%
INDIAN RUPEE / EURO (INR/EUR) 0.14% 0.012252 Delayed Quote.4.40%
UNICREDIT S.P.A. 2.04% 9.964 Delayed Quote.-27.90%
US DOLLAR / EURO (USD/EUR) 0.20% 0.950209 Delayed Quote.8.91%
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Sales 2022 2 961 M 3 118 M 3 118 M
Net income 2022 176 M 185 M 185 M
Net Debt 2022 - - -
P/E ratio 2022 3,98x
Yield 2022 -
Capitalization 709 M 746 M 746 M
Capi. / Sales 2022 0,24x
Capi. / Sales 2023 0,24x
Nbr of Employees 21 244
Free-Float 31,5%
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Luigi Lovaglio Chief Executive Officer & General Manager
Giuseppe Sica Chief Financial Officer
Maria Patrizia Grieco Chairman
Vittorio Calvanico Chief Operating Officer
Ettore Carneade Head-Controls, Compliance & Claims Area