MILAN, July 5 (Reuters) - Italy’s Monte dei Paschi di Siena said on Wednesday it expected to report a net profit of more than 1.2 billion euros ($1.4 billion) in 2021 as part of its restructuring plan approved by the European Commission.
On Tuesday the European Union approved a 5.4 billion euro state bailout of Italy’s fourth-largest lender after the bank agreed to a drastic overhaul.
In a statement, Monte dei Paschi said its 2017-2021 plan, which sees a return on equity of more than 10 percent in 2021, envisaged a headcount reduction of around 5,500 with the number of branches falling to around 1,400 from some 2,000 in 2016.
The bank will sell 28.6 billion euros of gross bad loans, of which 26.1 billion euros will be securitised.
It said it expected its CET1 ratio, a measure of financial strength, to be at 14.7 percent in 2021.
Burdened by bad loans and a mismanagement scandal, Monte dei Paschi has been at the forefront of Italy’s slow-moving banking crisis.
$1 = 0.8807 euros Reporting by Stephen Jewkes; Editing by Susan Fenton