The European Central Bank has determined the 2023 capital requirements for Monte dei Paschi, the world’s oldest bank, which has been struggling with financing difficulties in recent years.
550-year-old bank’s dividend ban lifted
The Italian banking giant announced on Tuesday that the European Central Bank (ECB) has set minimum capital requirements for Banca Monte dei Paschi di Siena for next year, and also lifts the ban on dividend distribution.
The statement said the ECB told Monte dei Paschi that it should keep the Common Equity Tier 1 ratio, a measure of financial strength, at at least 8.8%.
In the statement, which stated that the CET 1 ratio of the bank was 15.7% at the end of September, it was stated that this figure also takes into account the billions of capital increase made during the year.
The lender raised $2.6 billion in cash in November and defied tumultuous markets with a new issuance of shares. More than one-third of the revenue was earmarked to help finance staff exits and increase profits thanks to lower costs.
After a failed reprivatization attempt last year, Monte dei Paschi is trying to increase its appeal for a potential buyer under new CEO Luigi Lovaglio.
The United States was undiscovered when it loaned
Monte dei Paschi di Siena had been lending money before Christopher Columbus discovered America, before the Spanish Inquisition wreaked havoc, and before Henry 7th became king of England by defeating Richard III at the Battle of Bosworth.
The Monte dei Paschi di Siena bank was founded in 1472 as a pawn shop under the name Monte di Pietà.
Known as “Monte Baba” for its immense influence and patronage, the bank and foundation permeated Siana’s spirit as much as the annual Palio horse race.