Monte dei Paschi chairman resigns after capital row

Monte dei Paschi, the troubled Italian bank that emerged as Europe’s weakest in this summer’s stress tests, has lost its respected chairman Massimo Tononi following a spat with the government and JPMorgan over a €5bn capital hike.

On Wednesday evening, senior bankers said that Mr Tononi — an ex-Goldman Sachs banker and former chairman of Italy’s stock exchange — had tendered his resignation.

His departure comes just a week after that of chief executive Fabrizio Viola. Mr Viola stood down under pressure from Italy’s Treasury, which owns 4 per cent of Monte dei Paschi, and the two banks leading its capital raising consortium: JPMorgan and Mediobanca.

Earlier on Wednesday, Monte dei Paschi’s board confirmed that Mr Viola will be replaced by Bank of America Merrill Lynch’s Marco Morelli.

Italy’s government and the two banks had wanted Mr Viola replaced as he was regarded as a potential obstacle to raising more capital — having already tapped the market for €8bn during his tenure, cash that Monte dei Paschi quickly burnt through.

This change to the top level of management could shunt Monte dei Paschi’s capital hike into 2017, bankers have said. A crucial referendum on Italys’s constitution, which analysts warn could unseat reformist prime minister Matteo Renzi, is due to be held in early December — and the political risk it brings has damped investor interest in the bank’s capital raising.

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