It is believed that the lender will eliminate more jobs and close branch offices to scale down its operational expenses. Under the strategy, the lender will outline a plan to steadily decrease the bank’s €29bn Italian government bond portfolio.
The purpose of the whole exercise is to avoid nationalization, as the lender is struggling to save its business from collapse, reported Reuters.
The lender, which reported a net loss of €3.17bn in 2012 compared to €4.69bn during 2011, was accused by the financial regulators that it made an expensive acquisition in 2007 and executed loss-making derivative trades.
In February 2013, the lender borrowed €4.1bn ($5.5bn) from the state, and was asked to boost its restructuring plan if it wants to get the EU’s approval for the bailout.
The EU advised the bank to boost its capital level by €2.5bn in 2014, as against original planning to increase the capital buffer by €1bn, which seems to be a tough task in the current market situation.
As per terms of the Italian government’s bailout scheme, if Monte dei Paschi failed to reimburse its annual nine percent coupon on the state loans, it will issue shares to the treasury.
The troubled lender, which had lost approximately €8bn in the past two years, is not believed to return on profit trajectory prior to 2015.
