Monte Paschi Board Will Review Bastianini’s CEO Position at Feb. 7 Meeting

(Bloomberg) -- Banca Monte dei Paschi di Siena SpA said it will review the position of its chief executive next week, signaling a response to government pressure to replace him amid talks with the European Union over the nationalized bank's future.

The bank announced late on Wednesday that “an item of corporate governance” concerning Chief Executive Officer Guido Bastianini had been added to the agenda for the board's next meeting on Feb. 7. Italy's Finance Ministry, the bank main shareholder, is pressing to replace the CEO as it seeks a new EU deadline for the sale of the lender, people with knowledge of the matter have said.

The executive may be challenged by the board about one-off items included in the bank's accounts that boosted profit last year, the newspaper Repubblica reported without citing where it got the information. Bastianini rejects any accusation of misconduct, the newspaper said. Bastianini may be replaced temporarily by the Chief Financial Officer Giuseppe Sica, while a new CEO may be named by the next shareholder meeting in April, Repubblica added.

Monte Paschi was little changed in early Milan trading, up 0.5% at 0.94 euros ($1.06) as of 9:20 a.m.

The government is seeking approval from the European Union for a five-year business plan to revamp Monte Paschi and to set a new deadline to exit the lender after talks with UniCredit SpA collapsed last year.

Monte Paschi has been a financial burden for the Italian government since it was first bailed out in 2009, after being undermined by souring loans and derivatives deals that backfired. It has struggled to deliver consistent profit, given limited room for maneuver under terms the EU set in exchange for backing the aid plan.

Talks on selling Monte Paschi to UniCredit came to a halt over the question of how much capital Italy should inject, leading to the Treasury's failure to meet the end-of-last-year deadline to exit the bank.