Losses at Italian bank Monte dei Paschi di Siena soared to €1.69 billion in 2020, the state-owned lender said today, though its capital buffers held up supported by capital management actions.
The Italian government had been working on re-privatising the Tuscan lender.
But progress has been stymied by the collapse of its ruling coalition and a change in leadership at possible buyer UniCredit, the country's second-biggest bank by assets.
With its turnaround derailed first by lower-for-longer interest rates and now by the Covid-19 crisis, the bank is ill-equipped to face the fallout from the pandemic.
The Covid-19 crisis is expected to bankrupt numerous companies once the government unwinds extraordinary support measures.
The 63.5% higher losses reported in today's full-year results were driven largely by provisions against legal claims the bank booked after the conviction of two former executives.
Such provisions account for three quarters of a total of €1.3 billion in one-off charges.
Monte dei Paschi di Siena said its best-quality capital stood at 12.1% of assets at the end of December, only slightly down from 12.9% three months earlier despite a bad loan clean-up transaction completed in December that shaved around €1 billion off its capital base.
