Italy's Monte dei Paschi names new chairwoman to help steer recovery

Italy's Monte dei Paschi names new chairwoman to help steer recovery
People stand in front of Monte dei Paschi bank headquarters, downtown Siena, Italy, October 27, 2017. REUTERS/Stefano Rellandini
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SIENA, Italy (Reuters) – Italy’s fourth-biggest bank Monte dei Paschi di Siena <BMPS.MI>, rescued from the brink of collapse by a state bailout, has named a new chairwoman and board to help steer a course to recovery.

Shareholders on Monday appointed Stefania Bariatti as chairwoman to replace Alessandro Falciai, who decided to leave the bank citing personal reasons.

The new board, which will govern the bank to 2019, will comprise 14 members from the current 13.

“Today’s shareholder meeting closes a period of uncertainty that has lasted five years,” Falciai said, calling the period the stormiest in the bank’s centuries-old lifetime.

Weighed down by mismanagement, a derivatives scandal and bad debts, the world’s oldest bank turned to Rome for help after failing, in late 2016, to find buyers for a 5 billion euro share issue needed to keep it afloat.

After pumping in around 5.4 billion euros, the Treasury now holds about 68 percent of the lender.

Marco Morelli, former head of Bank of America Merrill Lynch in Italy appointed CEO at Monte dei Paschi last September, was confirmed in his position.

Morelli told shareholders that regaining profitability would take a long time since the bank needed to recoup years of total commercial inactivity.

“I won’t play the Pied Piper… ‘don’t worry, everything has been resolved’, is not something you’ll hear me say,” he said.

Monte dei Paschi posted a net loss of 3 billion euros in the first nine months of the year, with writedowns on loans totalling about 4.8 billion euros.

Earlier this year the bank tabled a five-year restructuring plan that included cutting thousands of jobs and selling assets to get the European Union’s blessing to receive state aid.

(Reporting by Silvia Ognibene; Writing by Stephen Jewkes; Editing by Edmund Blair)

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