Italy's Banca Monte dei Paschi di Siena announced late Thursday that CEO Fabrizio Viola has agreed to resign but said it would seek to name a successor soon as it courts investor approval for a restructuring plan unveiled in July.
Viola took the helm in May 2012 "at a time of extreme difficulty for the institute," and "leaves a profitable and solid bank," the lender said ollowing his meeting with the board that agreed on the departure.
The 58-year-old has agreed to stay in office until a successor is appointed "and to provide all necessary support," it added.
Monte dei Paschi shares were little changed Friday morning in Milan at €0.24, after having lost more than 87% of their value in the past year amid concerns over the lender's capital weakness. The stock has a market capitalization of around €716.9 million ($808.24 million).
The management shake-up comes as the lender faces an uphill battle to win investor backing for a share sale worth up to €5 billion. The stock issue is part of a restructuring plan entailing the transfer of its bad loans to a new securitization vehicle, which will be funded through the issue of senior, mezzanine and junior notes.
The transfer will be backed by the state's recently created bank rescue fund Atlante, which will invest €1.6 billion in the mezzanine notes.
Monte dei Paschi sold €3 billion of equity in June last year
Monte dei Paschi has previously said it aims to finish the restructuring by the end of this year, after getting shareholder approval at a meeting in October or November. Viola said in late July that the lender will issue a business plan around the end of September.
The lender on Thursday said nothing about the timetable for the plan, only saying that it includes a "structural and final solution" to its non-performing loans.
Monte dei Paschi, the world's oldest lender with roots going back to 1472, fared at the bottom of the class in a largely positive set of bank stress test results put out by the European Banking Authority in July.
The financial watchdog found that Monte dei Paschi would emerge with a fully loaded core equity Tier One capital ratio - a measure of capital strength based on dividing a bank's equity and additional qualifying capital divided by risk-weighted assets - of minus 2.44% in an adverse scenario.
Ratios at all but one other bank surveyed were found to have held above the Basel III minimum, though Allied Allied Irish Banks came in at 4.31% under the same scenario.
UniCredit came in at 7.10%, while Deutsche Bank (DB - Get Report) , also the subject of recent capital worries, clocked up a ratio of 7.8% in the hypothetical scenario. Austria's Raiffeisen-Landesbank, with a ratio of 6.12%, was the third-weakest, and Bank of Ireland, at 6.15%, was the fourth.