Thousands of striking workers at Italy's Monte dei Paschi di Siena, demonstrated against a staff cost-cutting plan on Friday, in the largest protest to hit the world's oldest lender in more than 30 years. "Get out! Get out!" shouted the workers outside the bank's neo-gothic headquarters in Siena, the picturesque Tuscan town where the venerable lender was founded in 1472 and is the biggest employer.
Monte dei Paschi, Italy's third-biggest lender, is in the middle of a radical revamp as its controlling shareholder - a charitable foundation - is forced to slash its 49 percent stake to repay debts and a new management team is being put in place to cut costs and restore profits.
Some 4,000 people snaked through the narrow, cobblestone streets of Siena in protest at the bank's plan to cut staff costs by 3 percent, something unions say could result in 1,500 job cuts. "We are worried but we hope the bank can rise from the ashes," said Vincenzo Crupi, a bank employee who travelled from southern Italy to join the demonstration.
It was the first strike at the bank in nearly 20 years and the biggest protest in the streets of Siena since 1981, residents said. Monte dei Paschi Managing Director Fabrizio Viola, a rare outsider appointed in January, is penning a restructuring plan to shore up the bank, which like other Italian lenders has been hit hard by the euro zone sovereign debt crisis.
Monte dei Paschi has a return on equity of just 2.4 percent and faces a 3.3 billion euros ($4.3 billion) capital shortfall to meet tougher European requirements. It is widely expected to scrap its 2011 dividend and book a big writedown on goodwil when it announces its results later this month. The bank has also been undermined by the debt crisis of its controlling shareholder, the Monte dei Paschi foundation. The foundation, controlled by Siena's politicians and meant to reinvest dividends in social projects, has run up 1.1 billion euros in debts to keep its grip on the bank.