MPS bank denies shortfall reports

(ANSA) - Milan, October 20 - 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.