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EU Economics

Italy in CRISIS: Monte dei Paschi bank shares SUSPENDED after huge plunge

ITALIAN bank Monte dei Paschi di Siena (MPS) saw its shares suspended in morning trading, following details of a new rescue plan for the troubled lender.

Investors rushed to sell, sparking a 23 per cent drop in the stock price, after it was confirmed Europe’s weakest bank plans to cut 2,500 jobs and close 500 branches.MPS is also hoping to sell off around €28billion (£25bn) worth of bad loans, which have weighed down Italy’s oldest lender and spooked markets in recent months.The plan was intially met with market cheer that pushed the bank’s share price up.

But frenzied selling soon took hold, forcing a suspension in trading.

Monte PaschiGETTY

Monte Paschi unveiled a new rescue plan on Tuesday


Monte Dei Paschi has billions of pounds worth of bad loans on its books


Italy’s banks holds around £270billion of so-called non-performing loans – a third of the eurozone’s total.But MPS has frequently been highlighted as the biggest worry.The lender has has a market value of less than £1billion – but has around £40bn of soured loans on its books.

MPS was found to be one of the weakest banks in Europe by stress tests in July.

It was hoped that a new chief executive Marco Morelli, who took to the helm of the bank last month, would be able to restore confidence in the bank.

And president of the European Central Bank (ECB) Mario Draghi has freqentyly called on politicians to find a solution to the problem of non-performing loans.Connor Campbell, financial analyst at Spreadex.com, said: “After announcing it intends to cut 2600 jobs, as well as sell off €28 billion in bad debts Monte dei Paschi went haywire, initially rising before plunging so much that trading had to be suspended.

“It is the kind of bitter pill the Italian banking sector as a whole better get used to taking if it wants to avoid being the biggest threat to the Eurozone’s stability.”

http://www.express.co.uk/finance/city/724920/Italy-s-Monte-dei-Paschi-bank-shares-SUSPENDED-after-huge-plunge

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