Alessandro Profumo, president of Monte dei Paschi di Siena, the oldest bank in the world and third largest in Italy, threatened with resignation after a group of rebel shareholders voted against a plan through which the bank saved from bankruptcy by the government would have raised three billion euros by selling shares to avoid nationalization.
The decisions brings uncertainty to the state-sponsored rescue efforts going on for two years for the Monte dei Paschi bank and stresses the cracks in the Italian banking system before the toughest stress tests that come for the European banking system in 2014.
Rebel shareholders, led by a charitable foundation that owns one third of the Monte dei Paschi bank voted against the sale of shares scheduled for January and supported by the Italian Government and the EU competition commissioner Joaquín Almunia as they want to keep control of the bank. The 451-year-old financial institution, has a market capitalization of two billion euros.
Foundation members, mostly residents of Siena, voted to postpone the sale after May to give the charity more time to raise money to finance its plans.
Foundation rejected the sale after the failure of talks with other Italian banking foundations and other investors, seeking support for keeping the 33 percent stake in the bank, according to sources close to the situation .
Monte dei Paschi needs money from investors to pay back the €4.1 billion in state aid received this year and avoid nationalization. Bank needed the state aid because it was hard hit by the sovereign debt crisis in the eurozone and due to losses from transactions with financial derivatives.
This is the second time Profumo, an internationally renowned banker seen as a reformer is in conflict with the Italian banking foundations. He left the UniCredit bank which he created it in September 2010 after a clash with the board.
Profumo, brought to Monte dei Paschi after years of mismanagement of the bank, said he will make a decision on the resignation in January.
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