LONDON (Reuters) - The top executives of bailed-out Italian bank Monte dei Paschi di Siena BMPS.MI told investors in London on Wednesday the bank is making progress with its turnaround plan, two fund managers who attended the meetings said.

FILE PHOTO: The entrance of Monte Dei Paschi di Siena is seen in San Gusme near Siena, Italy, September 29, 2016. REUTERS/Stefano Rellandini/File Photo

CEO Marco Morelli and CFO Andrea Rovellini said in one-to-one investor meetings they were confident about hitting targets agreed with EU authorities to clear the rescue, one fund manager said.

Morelli and Rovellini did not provide specific figures but said first-quarter earnings, due in May, would confirm the restructuring is on track, the second investor said.

Italy’ fourth-largest bank, brought low by mismanagement and a huge bad loan pile, has been the biggest threat to the country’s financial stability for years, until an 8.1 billion euro ($10 billion) bailout last summer handed the Rome government a 68 percent stake.

But concerns over the Tuscan bank have intensified after Italy’s inconclusive election last month, which could produce a government dominated by the anti-establishment 5-Star Movement and the far-right League.

Both parties have opposed the previous government’s efforts to shore up the country’s banks, which have been struggling to deal with soured loans left over from a recession.

Monte dei Paschi is due to offload by mid-2018 25 billion euros ($31 billion) in bad loans repackaged as securities in Italy’s biggest such disposal, with help from a state-sponsored, privately-funded banking support fund.

It plans further sales of 5.4 billion euros to cut soured loans to 14 percent of total lending by the end of 2019, a level which would still be almost three times the European average.

Yielding to regulatory pressures, all major Italian banks have raised their goals to cut problematic loans as bankers say the European Central Bank wants to see their level drop below 10 percent of total lending.

Investors fear Monte dei Paschi may need fresh capital to cover further loan losses or to be able to shed bad debts more quickly than anticipated under its restructuring plan. They also worry about the bank’s slow turnaround progress.

One fund manager said Morelli ruled out the ECB may demand a more ambitious clean-up, after lengthy negotiations over the turnaround plan agreed with Brussels last year.

Monte dei Paschi’s shares have lost 40 percent since they returned to trade on the Milan bourse in late October, prompting both Italy’s Treasury and the bank to deny fresh capital may be needed.

Monte dei Paschi made a 2017 loss of 3.5 billion euros, hit by 5.3 billion euros in loan writedowns as revenues dropped 6 percent.

Banking sources have told Reuters Monte dei Paschi needs to find a partner quickly, possibly as part of a three-way merger, but none have emerged so far.

UBI Banca UBI.MI, tipped in the Italian press as the most likely suitor, has repeatedly denied any interest.

Monte dei Paschi's shares closed up 1.5 percent, outperforming a 0.5 drop in the European bank index .SX7P

“It’s one of the few names that is up on the day,” said the fund manager, who holds Monte dei Paschi debt but no shares.

“If you assume that people are going back and voting with their wallets, then they (the management) must be at least getting the messaging right.”

The investor said he expected that the Italian government’s stake in the bank would ensure the situation “gets sorted out”.

He said Morelli and Rovellini, who were accompanied by the head of investor relations, did not talk about a possible partner. “They’ve got bigger issues,” he said, adding that he thought the bank had to be cleaned up first.

Meetings will continue on Thursday, one person said.

Monte dei Paschi declined to comment on the meetings.