MILAN — Italian lender Monte dei Paschi di Siena said on Tuesday it planned to lay off a tenth of its staff, shut branches and sell assets to win investor backing for a €5bn cash call that could shape outcomes for the wider banking sector. In a major gamble by a new CEO appointed last month to save the world’s oldest bank, the lender said it would launch a debt-to-equity conversion and a capital increase. The cash call would be held immediately after a December 4 constitutional referendum which could unseat Italy’s government and sour market sentiment. The 544-year-old bank is Italy’s third largest, and its ambitious plan calls for the sale of about €28bn in bad loans at below book value. "Ideally, the capital increase should start in the first seven or eight days of December, subject to market conditions," CEO Marco Morelli said. The attempted turnaround is the first big test of a state-backed campaign to steady the banking sector and clean up €360bn in problem loans, a third of th...
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