On Wednesday, Banca Monte dei Paschi di Siena SpA, the Italian lender, said that it laid out a five-year restructuring plan. The agreement with European Union includes cutting jobs and selling assets, which would let the Italian lender receive $6.1 billion in state aid.
According to Marco Morelli, the chief executive of Monte Paschi, the new plan would close 600 branches, and cut 5,500 jobs, leading the total branches to 1,400 and total headcount to around 20,000 by 2021.
In addition, the bank targeted its net profit of over €1.2 billion and a return on equity of 10.7% by 2021. The plan also includes the disposal of €28.6 billion of bad loans.
“The capital increase and bad-loan deconsolidation will have positive impacts on main key liquidity indicators, with the liquidity coverage ratio and net stable funding ratio well above the 100 percent target level over the restructuring plan horizon,” the Italian lender said.
“Overall this is a restructuring plan, it could not be otherwise, but it will also create a sustainable and profitable bank going forward,” Marco Morelli said. He added that a prospectus associated to the relisting of the shares of the bank would be finalized by the end of September.