Italy's Monte Paschi swings to second-quarter loss of 845 million euros as COVID takes toll
MILAN (Reuters) - Italy's state-owned lender Monte dei Paschi di Siena swung to an 845 million euro (760.7 million pounds) loss in the second quarter due to one-offs including more loan writedowns prompted by the coronavirus pandemic and provisions for legal claims.
The bank said it had booked a further 107 million euros in loan writedowns in the quarter, along with writedowns of 476 million euros on deferred tax assets and 384 million euros one-off charges including provisions for legal claims.
The bank's transitional CET1 ratio, an indicator of financial strength, stood at 13.4% at the end of June compared to 14.7% at the end of last year.
"The lockdown impacted us for most of the quarter," CEO Guido Bastianini said in a conference call.
In June the lender approved a plan to offload around 8.1 billion euros in bad and unlikely-to-pay loans to state-owned bad loan manager AMCO.
The European Central Bank has told the Tuscan bank to strengthen its capital base by around 700 million euros to allow the soured loan spin-off, two sources close to the matter said last month.
The Italian government currently controls Monte dei Paschi with a 68% stake, following an 8 billion euro bailout in 2017 to save the bank from sinking under problem debts and the fallout from a derivatives scandal.
The bank said as of July 31 it had received further extra-judicial claims from the Fondazione MPS, a charitable foundation which used to control Monte dei Paschi and has seen its wealth vanish as the bank sank deeper into trouble, for 3.8 billion euros.
Overall extra-judicial claims total 4.8 billion euros, Monte dei Paschi said.
(Reporting by Stephen Jewkes; editing by Valentina Za)
