... Monte dei Paschi di Siena SpA's (MPS) ratings reflect the bank's stronger capitalisation, improved asset quality and significantly lower pressure on capital from net impaired exposures, following the precautionary recapitalisation by the Italian state and the commitment to dispose of its doubtful loans. Stronger Capitalisation: As part of the precautionary recapitalisation approved by the European Commission (EC), the bank received a EUR3.9 billion capital injection from the state and EUR4.2 billion (net of own shares) in fresh capital from the conversion of junior and subordinated debt into equity (burden sharing) in August 2017. Doubtful Loan Deconsolidation: The ratings are based on our assumption that the bank will securitise about EUR26 billion doubtful loans by 1H18 and dispose of an additional EUR2.5 billion during 2018. This will bring the gross impaired loan ratio into line with the domestic industry average, down from a very high...
