After the flight of deposits, liquidity is needed. Monte dei Paschi di Siena could issue bonds for 15 billion in order to bring the institute back to the cash levels of the end of 2017 in 2015. The times are not defined yet, but it is almost certain that MPS will place the first of the bond issues, while a second will arrive in February.
As for the new industrial plan, it will probably be rewritten by March, with the draft ready by the end of January. The new strategic lines will have to be approved by Brussels, which will also have the last word on state intervention.
Only at that point can the precautionary recapitalization start, with the Treasury reaching 70% of the bank's capital thanks to an investment of around 6,6 billion.
As regards non-performing loans, the sale of the 27,7 billion non-performing loans needs to be rethought. Gacs (the public guarantee) could also be used on the senior tranches in the securitization. The Sienese bank will still have to get rid of the NPLs by following a different path from the one set with the bailout plan on the market.
The top management of MPS immediately started studying various alternatives. The ceo, Marco Morelli has indicated among the viable options the devaluation, the maintenance in the portfolio, the sale and also the separation through a vehicle of the bank.
