Monte Paschi Seeks EU3 Billion as Draghi Questions Outlook

Banca Monte dei Paschi di Siena SpA began selling 3 billion euros ($3.3 billion) of stock as its chief regulator questions the bank’s ability to revive returns and boost capital after the fundraising.

Monte Paschi must “provide a permanent solution to its structural problems, namely non-performing exposures, weak capital situation and earnings underperformance,” the European Central Bank President Mario Draghi said in a May 12 letter included in the bank’s share sale offer document. “The rights issue alone will not be sufficient to address these structural problems,” Draghi said in the letter.