Martedì, 16 Ottobre 2018

MPS stock plunges on analyst report on capital increase


Milan, September 9 - Stock in the Italian lender
Monte dei Paschi di Siena (MPS) plunged on Monday after an
analyst report said the bank's announced 2.5-billion-euro
capital increase would mean in significant dilution of investor
MPS shares sank 4.7% to 0.20 euro in the first minutes of
trading after the Goldman Sachs released its report, which
maintained a ''sell'' judgment, then rebounded to 0.21.
On Monday the MPS board announced it will discuss reworking
its reorganization plan according to European regulator
guidelines at its board meeting on Wednesday.
The board aims to approve the new plan at a subsequent
board meeting on September 24, in order to resubmit it for
European Commission approval.
Italy's third-largest lender presented a restructuring plan
to European authorities in June, and has been selling assets and
cutting branches in an effort to return to profitability to
avoid defaulting on government bailout funds.
In mid-August, the mayor of the Tuscan city where the
world's oldest operating bank is based warned the next six
months are key for the historic institution that holds a pivotal
financial and political role in the region.
''The next six months are crucial to save the bank,'' Bruno
Valentini told a news conference held on August 16, before the
historic Palio horse race in the city's iconic Piazza del Campo.
The mayor noted that MPS lost 350 million euros in the
first half of this year, raising the stakes for the remaining
six months.
Earlier this year, MPS became embroiled in scandal amid
massive losses and political furore over the previous Italian
government's 3.9-billion-euro bailout plan to cover its capital
needs, which also threatens the bank with State control should
it default.
The bank also became the target of probes early this year
after it emerged that a previously undisclosed series of
derivative and structured-finance deals produced losses of
around 720 million euros for MPS.
Former senior MPS officials - from a previous management -
are facing penalties totalling as much as five million euros
from the Bank of Italy for alleged fraud and corruption.

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