LONDON — The Italian bank Monte dei Paschi di Siena said on Wednesday that its board had approved a plan to sell new shares to raise as much as 2.5 billion euros, or about $3.1 billion, to satisfy demands that it bolster its capital cushion.
Monte dei Paschi, the world’s oldest operating bank, emerged as the worst-capitalized in a review of 130 eurozone banks by the European Central Bank last month. Thirteen banks, including four in Italy and two in Greece, were shown to need more capital to prepare for future financial shocks.
“The bank is committed to fully complying with the requests of the E.C.B. in implementing the capital plan,” Monte dei Paschi said in a news release.
Monte dei Paschi had until Monday to tell the central bank how it intended to raise money to cover a €2.1 billion shortfall. That is the amount the E.C.B. said was required for the bank to have an adequate cushion against losses in the event of a crisis.
Banks identified by the central bank as having shortfalls have up to nine months to execute their capital plans.
Monte dei Paschi has been struggling to cope with underperforming and bad loans and the fallout from its expansion before the financial crisis, including its acquisition of the Italian bank Antonveneta for €9 billion in 2008.
Monte dei Paschi, based in Siena, received a €4.1 billion government bailout in 2012, of which it has repaid all but €750 million.
Under the plan announced on Wednesday, Monte dei Paschi said it would sell up to €2.5 billion in new shares, allowing it to meet the central bank’s capital requirements and to repay €1.07 billion in government-backed bonds ahead of their 2017 maturity date.
The rights issue is expected to be completed in 2015, and nine banks acting as underwriters on the deal have agreed to buy any unsold shares in the offering.
Monte dei Paschi also said it planned to raise an additional €220 million through the sale of its stakes in several noncore assets, which it did not identify but said would not affect the bank’s “future profitability.”
After the results of the European Central Bank review were announced on Oct. 26, Monte dei Paschi said it had hired UBS and Citigroup to act as financial advisers to help devise the capital plan and explore further “strategic alternatives” for the bank.
Those alternatives could include a merger, but it is unclear if another bank would be interested in acquiring Monte dei Paschi. Intesa Sanpaolo, a larger Italian rival, has ruled out acquiring Monte dei Paschi, according to Reuters.