ROME — The Italian government signaled on Monday that it had no interest in nationalizing Monte dei Paschi di Siena, the country’s oldest bank, after shareholders over the weekend overruled bank management and delayed plans to raise urgently needed cash.
A spokesman for the Italian treasury confirmed on Monday reports that the government was not eager to take responsibility for the troubled bank. The government is already dealing with a severe recession and internal political turmoil.
The Bank of Italy and Consob, which oversees the Italian stock market, are monitoring events closely, according to an official with knowledge of the situation. Monte dei Paschi shares closed higher on Monday, but problems at the bank have the potential to provoke market turmoil in a country already suffering from a broader banking crisis and a severe shortage of credit.
The decision by Monte dei Paschi shareholders on Saturday to postpone the share sale of 3 billion euros (about $4.1 billion) left turnaround plans for the bank in limbo and raised the possibility that it would not be able to repay government bailout funds starting in mid-2014.
Debt to the government would then convert to Monte dei Paschi shares, in effect nationalizing the bank, which has survived numerous wars and crises since its founding in 1472 but whose future is now in doubt.
On Saturday, shareholders gathered in Siena voted to delay the share sale at least until May, in accordance with the wishes of the charitable organization that is Monte dei Paschi’s largest shareholder.
Alessandro Profumo, the chairman of Monte dei Paschi, had argued that the share sale must be held in January. Investment banks that were set to underwrite the transaction would not wait any longer than that, he said.
But the Monte dei Paschi Foundation, which once distributed bank profits to local charities and other organizations in and around the historic city of Siena, asked for more time to sell its 33.5 percent stake. Antonella Mansi, president of the Monte dei Paschi Foundation, said she thought that a consortium of banks underwriting the share sale would be willing to wait.
A spokesman for the Swiss bank UBS, the lead bank in the consortium, said on Monday that it was too early to comment on what the effects of the delay might be.
Italy’s treasury is trying to facilitate talks between the foundation and the bank aimed at raising the capital as soon as possible, said a person with knowledge of the matter.
According to the bank’s plan approved by the treasury and the European Commission, Monte dei Paschi has to repay €3 billion of the state aid by the end of 2014.
Luigi Tramontana, an analyst at Banca Akros in Milan, said it could be more difficult for Monte dei Paschi to issue new shares later in the year because many other banks would also be trying to raise cash. Banks in the euro zone are trying to bolster their reserves under pressure from the European Central Bank, which is undertaking a thorough review of bank books to uncover hidden problems.
“The rights issue’s postponement increases the uncertainty over the bank’s ability to avoid full-blown nationalization within a year or so,” Mr. Tramontana said in a note to clients Monday.
Gaia Pianigiani reported from Rome and Jack Ewing from Frankfurt.