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  • dr_goldman_scrotemsacks dr_goldman_scrotemsacks Apr 1, 2013 4:05 PM Flag

    Wall St. Journal.. April 2013.. Billions of euro left the 3rd largest italian bank


    MILAN—Italy's Banca Monte dei Paschi di Siena BMPS.MI 0.00% said its deposits fell by "some billions" of euros following a recent scandal over losses on so-called structured-product contracts.

    Structured products are a broad category encompassing a range of complex financial bets.

    The disclosure of the "operations at issue and of their consequence on the bank's assets exposed the bank to reputational damage that was immediately translated into...the withdrawal of some billions [of euros] in deposits," the bank said in a document posted on its website on Saturday, ahead of a shareholders' meeting scheduled on April 29.

    In February, the bank, Italy's third-largest by assets, said a review of its financial portfolio found that three complex structured transactions would have a negative impact of €730 million ($936 million) on its 2012 final results.

    "The board of the bank...has found mistakes in the accounting representation" of three deals, known as the Alexandria, Santorini and Nota Italia transactions, the bank said in a statement at the time. "These mistakes will be rectified on the 2012 balance sheet."

    During a conference call Thursday held to present the bank's 2012 results, the bank's chief financial officer, Bernardo Mingrone, said that the bank was "quick in recovering ground in March" on deposits lost in February. He declined to give a forecast of the level of deposits at the end of the first quarter this year.

    The bank posted its third quarterly net loss in a row. In the fourth quarter, it lost €1.59 billion ($2 billion), compared with a loss of €4.95 billion a year earlier.

    Like most of its domestic peers, the bank substantially increased its loan-loss provisions in the final quarter of 2012; Italy's recession continues to pressure Italian lenders' asset quality.

    Net loan-loss impairments were about €1.4 billion in the fourth quarter, compared with about €470 million in the same quarter of 2011.

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