Banca Monte dei Paschi di Siena SpA, the bailed-out Italian lender embroiled in a fraud probe, is unlikely to attract investment interest from foreign banks operating in Italy, said Guido Rosa, head of the association of foreign banks in the country.
Monte Paschi, which received 4.1 billion euros ($5.5 billion) in February selling bonds to the government, is seeking 1 billion euros of capital from private investors by 2015 as part of a plan to repay the state aid.
Chairman Alessandro Profumo said in October he wasn’t aware of new investors interested in buying a stake, adding that the bank wanted to wait for better market conditions before selling shares.
“It’s difficult for a foreign bank to settle for a minority stake, and Monte Paschi’s governance is very complicated,” Rosa, president of the foreign bank group, known as AIBE, said in a phone interview. “There are very few consolidation cases involving Italian banks that may attract foreign lenders.”
Foreign banks in Italy reduced their corporate loans as well as government bond holdings last year as the country’s longest recession in 20 years and political gridlock increased uncertainty about investment returns in Italy.
Total assets of the 102 foreign lenders operating in Italy represented 16.1 percent of total bank assets at the end of 2012, 1.4 percentage points less than in 2011, according to an AIBE report published today. Non-residents reduced their public-debt holdings by more than 40 billion euros last year, while foreign bank lending was down 2.2 percent in 2012 as project financing dropped by half to 2.6 billion euros.
“In the current situation I don’t see a chance of growth for foreign banks; Italy needs structural reforms,” Rosa said. “If the government doesn’t take concrete actions by autumn the risk of disengagement from Italy by outside lenders becomes more concrete.”
The Milan-based AIBE is a trade association representing about 40 foreign banks operating in the country, including Deutsche Bank AG, Societe Generale SA and Bank of America Corp.