By Silvia Aloisi
MILAN (Reuters) - Banca Monte dei Paschi di Siena (MI:BMPS) posted its first quarterly net profit in three years but delayed its business plan targets by a year, underscoring the challenges Italy's third-biggest lender faces to make money.
Monte dei Paschi must carry out a 3-billion-euro ($3.4 billion) capital increase by late July to plug a shortfall exposed by a European review of lenders, and has been told by the European Central Bank (ECB) to find a merger partner quickly to fix its problems.
The bank's Common Equity Tier 1 ratio - a key measure of financial strength - stood at 10.9 percent at the end of March, including the planned cash call, it said late on Friday.
That is up from 10.7 percent at the beginning of January and above a 10.2 percent minimum requirement set by the ECB.
The bank reported a net profit of 72.6 million euros in the three months to March, above an average forecast of 27 million euros in a consensus of analysts compiled by Reuters.
The lender is now forecasting a net profit of around 880 million euros in 2018 - a year later than estimated in its previous 2013-2017 business plan.
It said this was due to the difficult economic and financial environment, the outcome of the European health check of banks last year and the strict capital requirements imposed by the ECB.
Monte dei Paschi said last month that its exposure to Japanese bank Nomura (T:8604) was breaching regulatory limits because, at around 3.4 billion euros, it represents 35 percent of its regulatory capital - or 10 percentage points above the level of exposure allowed to a single party.
The bank has said it is assessing all options to bring that exposure, which is linked to a 2009 derivative trade known as Alexandria, back within the limits, including by terminating the trade.
In Friday's statement, the bank said it was in talks with the ECB to see whether the planned capital increase would be enough to bring the exposure back within the ceiling allowed by regulators.
The bank ended 2014 with a loss of 5.3 billion euros, bringing total losses since 2011 to 14.6 billion euros.
"The return to profit in the first quarter of 2015, achieved against a backdrop of new and stricter European regulations, confirms that our industrial plan is achieving the first positive results," CEO Fabrizio Viola said.
($1 = 0.8918 euros)
