You are here
Italy's crisis-hit BMPS bank to cut 2,600 jobs, close branches
[MILAN] Italian bank Monte Paschi di Siena (BMPS) announced on Tuesday plans to cut 2,600 jobs and close around 500 branches in an effort to turnaround the troubled lender.
BMPS, the world's oldest bank still operating today, unveiled the overhaul as it posted a net loss of 1.15 billion euros (S$1.74 billion) in the third quarter.
Losses linked to loans led to the result, which compared to a net profit of 255.8 million euros in the same period a year earlier, the bank said.
But under new chief executive Marco Morelli, the bank now aims to cut costs by closing about a quarter of its 2,000 branches and slashing personnel costs by nine percent over three years.
It targets net profit above 1.1 billion euros in 2019 under the vast three-year overhaul, it said.
Italy's third-biggest lender will also seek improvements of its loans and risk reduction.
The bank was found to be Europe's weakest major bank in tests undertaken by the European Banking Authority and its finances have raised concerns for the broader Italian banking sector.
It announced a rescue plan in late July that entailed offloading gross non-performing loans worth 27.6 billion euros into a separate entity, while seeking investors to inject new capital of up to 5.0 billion euros into the bank.
Shares in the bank have collapsed since the start of the year but have firmed in recent days on the Milan stock exchange.