Monte Paschi's touted new CEO in Frankfurt to meet ECB: source
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Marco Morelli gestures during a meeting in Milan November 11, 2011. REUTERS/Imagoeconomica
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By Paola Arosio
MILAN (Reuters) - Marco Morelli, the frontrunner to take over the helm at troubled Italian lender Banca Monte dei Paschi di Siena
Morelli traveled to Frankfurt with Monte dei Paschi Chairman Massimo Tononi and the head of the bank's nomination committee, Alessandro Falciai, the source added.
The appointment of Morelli, Monte dei Paschi's chief financial officer until 2010, has already received an informal nod from the ECB, a separate source said over the weekend.
But another source close to the matter said the selection must go to the ECB's supervisory board for a formal vote and the governing council must also sign off.
Morelli, currently head of Bank of America Merrill Lynch (NYSE: BAC) in Italy, has been widely tipped to become CEO since Fabrizio Viola agreed to step down last Thursday.
Viola has overseen two share sales since 2014, raising 8 billion euros ($9 billion) which Monte dei Paschi has burned through. Bankers have said a new face was needed to win investors over to a third issue, and avert a banking crisis that would send shockwaves across Europe.
Morelli and Monte dei Paschi representatives were not immediately available to comment. The ECB declined to comment.
Tononi and Falciai will discuss the choice of the new CEO in a first meeting with the ECB on Tuesday, according to the first source.
Morelli himself will discuss the lender's rescue plan in a separate meeting later in the day, said the source, who added that it was an unusual move for the ECB to meet a CEO-in-waiting and this was probably tied to a desire to speed up the plan.
Monte dei Paschi, which emerged as Europe's weakest bank in stress tests in July, has pledged to launch a cash call of up to 5 billion euros before the end of the year and sell 9.2 billion euros of bad loans.
The bank needs to move quickly to implement the package and avert the risk of being wound down. But another source has previously said the share sale could be put back to next year because of political uncertainty ahead of a make-or-break constitutional referendum this autumn.
On Monday Economy Minister Pier Carlo Padoan said the board of Monte dei Paschi would meet on Wednesday to appoint a new CEO.
Italy's Treasury is the top shareholder in the Tuscan lender with a 4 percent stake following two state bailouts of the world's oldest bank during the financial crisis.
(Reporting by Paola Arosio; Writing by Stephen Jewkes; Editing by Pravin Char, Janet McBride)
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