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Monte dei Paschi 'optimistic' about rights issue

BMPS Deputy CEO defends huge rights issue

Banca Monte dei Paschi di Siena's (BMPS) deputy chief executive told CNBC he is optimistic that its massive rights issue launched on Monday will be enough to bolster the troubled lender's finances.

The Italian bank's stock was suspended on opening for a second day on Tuesday, after the launch of a 5 billion euro ($6.8 billion) share sale. BMPS shares' 20 percent rise on Monday was attributed to technical difficulties.

Read MoreMonte Paschi shares tumble, rights issue confirmed

But BMPS' CFO and Deputy CEO Bernardo Mingrone said he wouldn't read investor intentions into the stock's movements or failure to open.

Mingrone defended the size of the bank's rights issue, which is almost twice the size of its market capitalization, and was raised to 5 billion euros from 3 billion euros. He said it would act as a buffer ahead of the results of European Central Bank (ECB)'s stress tests, or asset quality review (AQR).

"What we did by increasing the size is position ourselves walking into AQR at a par with our best competitors in the market," he said in an exclusive interview.

The headquarters of Banca Monte dei Paschi di Siena SpA, the oldest surviving bank in the world and Italy's third-largest bank.
Matt Clinch | CNBC

The bank's conviction was that it wouldn't need to raise more cash, Mingrone said, "otherwise we would have done more."

"But clearly we'll only have certainty once the process is over... Right now we are optimistic about our ability to pass this given the size of the offering," he added.

Read MoreMonte Paschi Loss Could Be Up to 1 Billion Euros

BMPS was brought to the brink of collapse by the combination of the euro zone financial crisis and a derivatives trading scandal that emerged in 2013. It requested a 4.1 billion euro state loan ($5.57 billion) to stay afloat.

European Union authorities approved the loan on the condition that the bank implemented a turnaround plan including a capital increase and thousands of job cuts, branch closures and cost-cutting measures.

BMPS sought to attract investors to the rights issue by pricing the shares at 1 euro each - a 35.5 percent discount from market prices, taking into account the new shares.

But Mingrone defended the discount. "It's pretty much in line with recent rights offerings in the Italian market," he told CNBC. "I wouldn't say this discount is particularly steep, given the size of the offering."