Italy government undersecretary says Monte Paschi won't need state aid

December 1, 2016 10:22 AM EST

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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MILAN (Reuters) - Ailing Italian bank Monte dei Paschi di Siena will not need state support, Claudio De Vincenti, an undersecretary at the prime minister's office, said on Thursday.

The bank, which emerged as the weakest lender in a European health check of the sector this summer, is seeking to raise 5 billion euros ($5.3 billion) by year-end to plug a capital shortfall.

However, the plan has been overshadowed by a Dec. 4 referendum that could unseat the government of Prime Minister Matteo Renzi, raising concerns that the bank's capital raise may fall short due to market turbulence.

"We are very, very confident that Monte dei Paschi's transaction will go very well," De Vincenti told reporters.

"There'll be no need for state intervention, Monte dei Paschi is perfectly capable of raising capital on the market."

(Reporting by Elisa Anzolin, writing by Silvia Aloisi)

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