Qatar's SWF said to fail to commit to bailout of world's oldest bank

Italy's Banca Monte dei Paschi di Siena likely to be nationalised after deal to attract Qatari funds is reportedly unsuccessful
Qatar's SWF said to fail to commit to bailout of world's oldest bank
(Giuseppe Cacace/AFP/Getty Images)
By Staff writer
Thu 22 Dec 2016 01:59 PM

The world's oldest bank is said to be on the brink of being nationalised after a deal to attract Qatari funds failed, it was reported on Thursday.

Italy's Banca Monte dei Paschi di Siena will probably fail to lure sufficient demand for a $5.2 billion capital increase, leading to what would be the country’s biggest bank nationalisation in decades, Bloomberg reported, citing sources.

Last month, it was reported that Qatar's sovereign wealth fund had expressed a preliminary interest in backing the bank's emergency cash call but Bloomberg said no anchor investor had been found.

Qatar Investment Authority (QIA), estimated to hold $256 billion of assets, has made investments in high-profile European assets such as Credit Suisse and Volkswagen.

Bloomberg added that other institutions that were considering buying shares in the bank have indicated that they would put funds in the troubled bank only if it’s able to raise 1 billion euros from cornerstone investors.

The bank needs to raise the funds by the end of the year or risk being wound down. Monte dei Paschi emerged as the worst performer in European stress tests that showed its capital would be entirely wiped out in a severe economic downturn.

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