Decline and near fall of Italy's Monte dei Paschi, the world's oldest bank

View of the logo of Monte dei Paschi di Siena (MPS), the oldest bank in the world, which faces massive layoffs as part of a planned corporate merger, in Siena, Italy. REUTERS / Jennifer Lorenzini

Four years after spending €5.4 billion ($6.3bn) to rescue it, Rome is in talks to sell Monte dei Paschi (BMPS.MI) to UniCredit (CRDI.MI) and cut its 64% stake in the Tuscan bank, writes Valentina Za, Reuters.

Here is a timeline of key events in the recent history of Monte dei Paschi (MPS), which have made it the epitome of Italy's banking nightmare.

NOVEMBER 2007 - MPS buys Antonveneta from Santander (SAN.MC) for €9bn in cash, just months after the Spanish bank paid €6.6bn for the Italian regional lender.

JANUARY 2008 - MPS announces a €5bn rights issue, a €1bn convertible financial instrument called Fresh 2008, €2bn in subordinated, hybrid capital bonds and a €1.95bn bridge loan to fund the Antonveneta deal.

MARCH 2008 - The Bank of Italy, led by Mario Draghi, approves the Antonveneta takeover subject to MPS rebuilding its capital.

MARCH 2009 - MPS sells €1.9bn in special bonds to Italy's Treasury to shore up its finances.

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JULY 2011 - MPS raises €2.15bn in a rights issue ahead of European stress test results.

SEPTEMBER 2011 - The Bank of Italy provides €6bn in emergency liquidity to MPS through repo deals as the euro zone sovereign debt crisis escalates.

DECEMBER 2011 - The European Banking Authority sets MPS' capital shortfall at 3.267 billion euros as part of a general recommendation to 71 lenders to boost their capital reserves.

FEBRUARY 2012 - MPS cuts its capital needs by €1bn by converting hybrid capital instruments into shares.

MARCH 2012 - MPS posts a €4.7bn 2011 loss after billions of goodwill writedowns on deals including Antonveneta.

MAY 2012 - Italian police search MPS headquarters as prosecutors investigate whether it misled regulators over the Antonveneta acquisition.

JUNE 2012 - MPS says it needs €1.3bn in capital to comply with EBA's recommendation.

JUNE 2012 - MPS asks Italy's Treasury to underwrite up to another €2bn in special bonds.

OCTOBER 2012 - Shareholders approve a €1bn share issue aimed at new investors.

FEBRUARY 2013 - MPS says losses stemming from three 2006-09 derivatives trades amount to €730m.

MARCH 2013 - MPS loses €3.17bn in 2012, hit by plunging prices on its large Italian government bond holdings.

MARCH 2014 - MPS posts 2013 net loss of €1.44bn.

JUNE 2014 - MPS raises €5bn in a deeply discounted rights issue and repays the state €3.1bn.

OCTOBER 2014 - MPS emerges as the worst performer in Europe-wide stress tests with a capital shortfall of €2.1bn.

OCTOBER 2014 - The former MPS chairman, chief executive and finance chief are sentenced to three-and-a-half years in jail after being found guilty of misleading regulators.

NOVEMBER 2014 - MPS plans to raise up to €2.5bn after stress tests results.

JUNE 2015 - MPS raises €3bn in cash having upped the size of its rights issue after posting a €5.3bn net loss for 2014 on record bad loan writedowns. It repays the remaining €1.1bn state underwritten special bond.

JULY 2016 - MPS announces a new €5bn rights issue and plans to offload €28bn euros in bad loans as European bank stress tests show it would have negative equity in a slump.

DECEMBER 2016 - MPS turns to the state for help under a precautionary recapitalisation scheme after its cash call fails. The ECB sets the bank's capital needs at €8.8bn.

JULY 2017 - After the ECB declares MPS solvent, the EU Commission clears the bailout at a cost of €5.4bn for the state in return for a 68% stake. Private investors contribute €2.8bn for a total of €8.2bn.

FEBRUARY 2018 - MPS swings to profit in 2018 but says its updated projections are below EU agreed restructuring targets.

OCTOBER 2018 - MPS completes Europe's biggest bad loan securitisation deal, shedding 24 billion euros in bad debts.

FEBRUARY 2020 - MPS posts €1bn 2019 loss.

MAY 2020 - CEO Marco Morelli steps down urging Rome to secure a partner for MPS as soon as possible. He is replaced by 5-Star backed Guido Bastianini.

AUGUST 2020 - Italy sets aside €1.5bn to help MPS as it works to meet a mid-2022 re-privatization deadline.

OCTOBER 2020 - MPS shareholders approve a state-sponsored plan to cut soured loans to 4.3% of total lending. Italy's stake falls to 64% as a decree paves the way for its sale.

OCTOBER 2020 - A Milan court convicts MPS' former CEO and chairman for false accounting in a surprise decision that forces MPS to boost legal risk provisions.

DECEMBER 2020 - MPS says it needs up to €2.5bn in capital.

DECEMBER 2020 - Italy approves tax incentives for bank mergers entailing a €2.3bn benefit for an MPS buyer.

JANUARY 2021 - MPS says to open its books to potential partners.

FEBRUARY 2021 - MPS posts €1.69bn loss for 2020.

APRIL 2021 - Andrea Orcel takes over as UniCredit CEO.

JULY 2021 - UniCredit enters exclusive talks with Italy's Treasury to buy "selected parts" of MPS, a day before European banking stress test results show the smaller bank's capital would be wiped out in a slump.

($1 = €0.8527)

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