MILAN: Monte dei Paschi di Siena will launch a planned 3 billion euro ($3.4 billion) rights issue at the end of May, its CEO told daily Il Sole 24 Ore, adding it might be interested in a tie-up with an Italian cooperative bank.
Monte dei Paschi emerged as the weakest lender in a Europe-wide review of banks last year and has been told by the European Central Bank to boost its capital and find a partner.
So far the bank had not received formal expressions of interest from any potential partners, Fabrizio Viola said, adding the priority was the rights issue.
"We plan to start (the cash call) at the end of May, to complete it by June," the CEO said on Sunday, adding the ECB would have to approve the schedule.
Monte dei Paschi, Italy's No. 3 lender, was also looking for a partner to create a large and more profitable bank. "From an industrial point of view, a tie-up between Monte dei Paschi and a large cooperative bank does make sense," said Viola, who has served as top executive at Banca Popolare di Milano in the past.
Italy's biggest cooperative banks - or 'popolari' - are bracing for a wave of mergers following a government reform that forces them to convert into joint stock companies within 18 months.
Viola did not specify a potential partner.
Bankers told Reuters last month UBI Banca would be the most likely domestic candidate to take over Monte dei Paschi.
On Friday Monte dei Paschi reported a better than expected net profit of 72.6 million euros in the three months to March.
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