Brussels, 08/10/2013 (Agence Europe) - Last week, the European Commission and the board of Italian bank Monte dei Paschi di Siena (MPS) agreed on a restructuring plan that could well be approved in the next few days, once it has been officially notified to the European Commission, explained a spokesman for the EU Competition Commissioner on Tuesday 8 October.
Various sources say that the restructuring plan includes: a €2.5 billion increase in the bank's capital by the end of 2014; the repayment by the end of 2014 of between €3 billion and €4.1 billion of state aid paid in January in the form of recapitalisation through the purchase of bonds; reducing the bank's running costs by the end of 2014 by €440 million by closing 550 branches, making 3,300 redundant in addition to the 4,700 redundancies already planned and restricting top managers' pay to €500,000 a year (failing which, the bank would have to fully replay the €4.1 billion state loans); ending all the bank's trading on its own account and reducing the bank's exposure to Italian bonds from €23 billion to €17 billion by 2017. The agreement would set in stone a tightening up of the initial restructuring plan given the go-ahead by the European Commission in July in return for a state bailout of €3.9 billion (see EUROPE 10898). (FG/transl.fl)