* Bank executives to meet investors in
* Investors worried that the Italian lender needs more cash
* Political uncertainty seen as another fear factor
By Maiya Keidan, Pamela Barbaglia and Paola Arosio
Monte dei Paschi is grappling with falling revenues and highbad loans that led to an
Political uncertainty in
The parties that currently seem most likely to form the nextgovernment - the anti-establishment 5-Star Movement and thefar-right League - have both expressed hostility to the bank'sbailout and resistance to any forms of public support forItalian banks.
Monte dei Paschi may need to raise more money or be rescuedby a healthier lender if regulators force it to cut its bad loanburden more quickly than currently anticipated in itsrestructuring plan, one of the sources said.
UBI Banca has been tipped in the Italian press as apossible white knight for Monte dei Paschi, but like otherItalian banks it has repeatedly denied interest.
One of the sources said the only option for Monte dei Paschimight be to engineer a three-way merger with two healthierdomestic peers.
The world's oldest bank will not need to go through Europeanstress tests this year but a banking source said it still neededto find a near-term solution to shore up its finances.
Monte dei Paschi would not be able to rely on the Treasuryand the Bank of
The Treasury is in wait-and-see mode in the absence of agovernment while the Bank of
Last week, the bank issued a statement to quell speculationit may need fresh capital and said its turnaround plan was ontrack.
REASSURANCE NEEDED
One of the sources and one shareholder in the bank saidMonte dei Paschi's CEO Marco Morelli is seeking to reassureinvestors concerned with the decline of the share price and slowprogress on the restructuring plan agreed with the EUCommission.
The bank's newly-appointed chief financial officer, AndreaRovellini, will also join the investor meetings, which have beenorganised by Barclays.
Shares in Monte dei Paschi have lost around 40 percent oftheir value since they resumed trading on the
"There is no reason to buy the stock: no signs of turnaroundyet, possible further loan losses and the absence of a buyerwhich - by now this is clear - is needed," said Luca Fer,founder of BxItaly & BxWorld Hedge Funds which became ashareholder of the bank following a debt-to-equity conversionwhich was part of the bailout.
Monte dei Paschi posted a 2017 loss of
"They've got to communicate and they've got to have acredible plan," the shareholder said.
The bank will offload by mid-2018
It plans another
It aims to trim that ratio to 14 percent in 2019 at a timewhen the European Central Bank is pressing Italian lenders tocut their proportion of bad loans to below 10 percent of totalloans.
The investor, who spoke on condition of anonymity, said thebank would have to raise one or
"The market needs to be realistic because this is not aneconomy that is firing at full growth potential even if thingsare better than they were," he said. "What makes it worse thistime around is the political environment in
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