Monte dei Paschi CEO agrees to resign

Banca Monte dei Paschi di Siena said Chief Executive Fabrizio Viola has agreed with the bank’s board to resign; the summit was dedicated to updates on the business plan and the rescue maxi-operation institution with a recapitalization of up to 5 billion euro.

Just the difficulties of placing an increase of that magnitude, as evidenced by the banks business operation to work on the market, would have led to the choice to present the third increase in three years with a different banker.

Viola's resignation was in the air for some weeks but the Siena-based institute's president Massimo Tononi was quick to deny any kind of rumor about it. Now, some questions remain to be clarified.

MEF sources – representing the first MPS shareholder, with a stake of 4.02% – report that "in Siena everything is under control" and that the choice of the new chief executive will take place rapidly. The person most accredited for the succession is Marco Morelli, number one in Italy BofA Merrill Lynch and former MPS finance director.

However, with the resignation, the capital increase could slip in early 2017, probably in February. It should not change much, however, in the structure of the increase. The investment banks involved in the plan are attempting to reduce the size of the recapitalization from 5 bn to 2 bn million euro, by converting to equity subordinated bonds.