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Monte dei Paschi di Siena, the world’s oldest bank, swung to a loss of €3.38bn in 2016 as it set aside larger provisions for bad loans, the company said on Thursday.
Italy’s third-largest bank by assets logged a loss of €2.53bn in the fourth quarter, following a €1.15bn loss in the third — which offset profits in the first six months of the year.
MPS said it set aside €2.6bn “due to the revision of methodologies” and for the evaluation of non-performing loans last year. Its common equity tier 1 ratio (CET ratio), a key measure of financial strength, declined to 8 per cent at the end of December, compared with 12 per cent at the end of the previous year.
MPS said in December that it would need government funds to help prop it up, after it failed to raise new capital demanded by regulators from private investors.
The bank said overall revenues fell 18.4 per cent from a year ago to €4.5bn in 2016.
MPS’s shares fell 88 per cent last year and have declined every year for the past decade.
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