ROME, Aug 12 (Reuters) - Banca Monte dei Paschi di Siena has cut its exposure to Japanese bank Nomura to within regulatory limits as required by the European Central Bank, the Italian lender said on Wednesday. In its half-yearly report published on its website, the bank said its pro-forma exposure to the Japanese bank stood at 24.33 percent at the end of June after a 3 billion euro capital increase in favour of the state and the closure of a series of asset swap deals with Nomura. “Considering the capital increase in favour of the Treasury and further position closures in regards to Nomura other than Alexandria... the pro-forma exposure at June 30, 2015 was 24.33 percent,” the bank said. Italy’s oldest bank had a 4.7 billion euro ($5.23 billion)net exposure to Nomura at the end of March, nearly half its total capital and almost double the 25 percent limit set by regulators for bank exposures to a single party. Most of the exposure lies with a 2009 loss-making derivative trade known as Alexandria. ($1 = 0.8982 euros) (Reporting by Stefano Bernabe, writing by Stephen Jewkes; editing by Agnieszka Flak)
Banca Monte dei Paschi di Siena has cut its exposure to Japan's Nomura Holdings to 25 percent of total capital so as to avoid the European Central Bank taking action against the bank for breaching Basel III rules, which stipulates that a company cannot have ties to a single counterparty exceeding a third of its regulatory capital.