ECB sets capital requirements for Monte dei Paschi for 2023, removes dividend ban

MILAN (Reuters) - The European Central Bank has set the minimum capital requirements for Banca Monte dei Paschi di Siena (MPS) for next year and also removed a ban on the distribution of dividends, the lender said in a statement on Tuesday.

The ECB told Monte dei Paschi it must maintain a Common Equity Tier 1 ratio - a measure of financial strength - of at least 8.8%, the statement added.

The bank's CET 1 ratio stood at 15.7% at the end of September, it said, adding that the figure took into account the multi-billion capital raise concluded later in the year.

The lender raised 2.5 billion euros ($2.6 billion) in cash in November, braving stormy markets with a new share issue. More than a third of the proceeds were earmarked to help fund staff exits and boost profits thanks to lower costs.

After a failed re-privatisation attempt last year, Monte dei Paschi is working to improve its appeal for a potential buyer under new CEO Luigi Lovaglio so as to allow the state to cut its 64% stake in a merger deal with a stronger rival.

($1 = 0.9384 euros)

(Reporting by Agnieszka Flak, editing by Gavin Jones)