Monte dei Paschi contacts banks to back 5 billion euro cash call: source
A man walks on a logo of the Monte Dei Paschi Di Siena bank in Rome, Italy September 24, 2013. REUTERS/Alessandro Bianchi/File Photo
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By Pamela Barbaglia and Silvia Aloisi
LONDON/MILAN (Reuters) - Banca Monte dei Paschi di Siena
JPMorgan (NYSE: JPM) and Mediobanca
He added that UBS
Monte dei Paschi wants to get approval from the European Central Bank for its proposed capital hike ahead of the release of the region's bank stress tests on Friday evening. Investors fear the tests will show the bank has insufficient capital levels to withstand an economic downturn.
Monte dei Paschi, UniCredit, Deutsche Bank, Morgan Stanley and Citi declined to comment. Goldman Sachs, Mediobanca, JPMorgan and UBS were not immediately available for comment.
Monte dei Paschi has set a multiple of between 0.5 and 0.6 of its tangible book value as a threshold to back the capital hike.
That's raising concern about its proposed valuation as the bank's share price has slumped by around 75 percent so far this year and is currently trading at just 0.1 of its tangible book value, the source said.
Discussions with Monte dei Paschi are currently underway and no final decision has been taken on which banks will be part of the consortium, the source added.
($1 = 0.9100 euros)
(Additional reporting by Paola Arosio and Stefano Bernabei; Editing by Rachel Armstrong)
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