Thousands of jobs to go at liquidated Italian banks

Intesa Sanpaolo said on Monday its planned acquisition of the good assets of Banca Popolare di Vicenza and Veneto Banca could lead to the closure of around 600 branches and the departure, on a voluntary basis, of around 3,900 staff.

Italy began winding up the two failed regional banks on Sunday in a deal that could cost the state up to €17 billion ($19 billion) and will leave the lenders’ good assets in the hands of Intesa, the nation’s biggest retail bank.

Rome spent the weekend drafting an emergency decree to liquidate the two banks, which collapsed after years of mismanagement and poor lending. The decree will have to be voted into law by parliament within 60 days.

The government will pay €5.2 billion ($5.82 billion) to Intesa, and give it guarantees of up €12 billion, so that it will take over the remains of the banks.

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Intesa Sanpaolo, Italy’s best-capitalised large bank, said last week it was open to purchasing the rump of the good assets for one euro on condition that Italy’s government passed a decree agreeing to shoulder the cost of winding down the two banks.

Intesa said on Monday the contract it had signed for the acquisition would become void should the decree not be converted into law or be amended in a way that would make the deal more expensive for the lender.

-Reuters