Italy's Monte dei Paschi di
Siena bank on Monday denied reports that it may be shown to have
significant capital shortfalls when the results of a European
Central Bank (ECB) assessment are released on Sunday.
Media reports have suggested that the bank, which received
a government bailout in 2012, will be shown to be short by as
much as 1.7 billion euro in capital when the ECB releases its
findings from a comprehensive assessment of European banks.
In a statement, MPS said that "the amounts of shortfall
relative to the comprehensive assessment (stated) in the press
are not reflected in partial and preliminary documentation that
the (MPS) bank has so far received," it said.
MPS, the world's oldest continually operating bank, also
said that because the ECB assessment is not yet complete,
allegations of shortfalls at this point "can only be partial and
preliminary".
The ECB has been reviewing more than 100 banks across
Europe to assess their capital levels and ability to withstand
various sorts of shocks.
Shares have been steadily falling in many banking stocks
recently, and MPS has been hit especially hard.
Late Thursday, MPS shares fell by 9.8% and trading
temporarily halted amid rumours about the outcome of the ECB
stress tests.
However, markets were calmer Monday and by mid-day after
the MPS statement, the bank stock was down by 3.1%, trading at
0.82 euros.
Troubled MPS raised some 5 billion euros in new capital in
early summer in order to repay a State bailout and avoid
nationalization, as well we shoring up reserves ahead of the ECB
assessment.
The bank received a 4.1-billion-euro bailout approved under
former premier Mario Monti, and had been threatened with
nationalization if it failed to repay the government support.
That came just before the bank was thrown into crisis when
it emerged in January 2013 that a shady series of derivative and
structured-finance deals had produced losses of 720 million
euros.
Since then, MPS has come under the spotlight in relation to
investigations for suspected insider trading and fraud.
MPS has also been at the center of a judicial investigation
into its acquisition of smaller rival Antonveneta in 2008 as
well as the derivatives trades the bank allegedly used to
conceal losses.
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