Nomura will forfeit $493m to end a derivatives contract and settle legal claims with Banca Monte dei Paschi di Siena SpA as prosecutors investigate whether a transaction known as Alexandria was used to obscure losses at the Italian bank.
Bloomberg News reports that the bank, which was set to earn $859m on the contract, will receive $386m from Monte Paschi to terminate the agreement 19 years early, the lender said in a statement Wednesday. The accord will boost Monte Paschi’s common equity Tier 1 ratio under Basel 3 rules by 70 basis points.
'The closure of the exposure to Nomura is a major milestone in the bank’s de-risking process', Luigi Tramontana, an analyst at Banca Akros who has a buy recommendation on the stock, wrote in a note Thursday.
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