Romans bearing gifts

7 January 2021 By Liam Proud Follow @liamwardproud

The lender’s shares rose after Reuters said the government may absorb 14 bln euros of its dud loans to ease a Monte dei Paschi merger. It makes a deal with the basket-case bank more palatable. But UniCredit investors should care more about legal risks and future government sway.

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Italy’s government may take on about 14 billion euros of UniCredit’s non-performing loans to make a deal for state-owned Banca Monte dei Paschi di Siena more attractive, Reuters reported on Jan. 6 citing sources.

State-owned loan manager AMCO may also rid Monte Paschi of some high-risk loans, according to the report.

The plan is part of a wider set of measures being readied by the Treasury in order to press ahead with the sale of its 64% stake in the troubled bank. The Treasury aims to have a range of solutions ready by the end of January, including providing possible state guarantees to shield future owners from 10 billion euros of legal claims. The goal is to have a deal ready to be approved by UniCredit’s annual general meeting in April, Reuters said.

UniCredit shares closed 6.1% higher on Jan. 6, while Monte Paschi shares were up 3.7%.

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State-owned loan manager AMCO may also rid Monte Paschi of some high-risk loans, according to the report.

UniCredit shares closed 6.1% higher on Jan. 6, while Monte Paschi shares were up 3.7%.

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