Volatile trading in Italy’s troubled BMPS bank

Volatile trading in Italy's troubled BMPS bank
BMPS, the world's oldest bank, is trying to turn around its ailing fortunes. Photo: AFP
Trading in ailing Italian bank Monte Paschi di Siena (BMPS) was repeatedly suspended on Wednesday amid highly volatile trading in Milan.

BMPS, facing massive job cuts and a swathe of branch closures to stem loan-linked losses, saw its shares slump 11.4 percent to 0.2613 euros in early trading, prompting an initial halt of trading.

The share price then briefly moved into the black but a flurry of further suspensions followed before settling down, off 3.5 percent at 0.286 euros around 1100 GMT – 76 percent down on the start of the year.

The Milan stock exchange as a whole lost 0.4 percent in morning trading.

BMPS, the world's oldest bank still operating today, said on Tuesday it plans to cut 2,600 jobs and close a quarter of its some 2,000 branches to try to turn a corner.

Its announcement came after Italy's third-largest lender posted a net third-quarter loss of 1.15 billion euros ($1.3 billion), which prompted volatile trading in its shares.

After last week's 56-percent share price gain, Monday saw a further rise of 28.3 percent before a Tuesday slump of 15 percent on apparent profit-taking.

The bank last year posted its first net profit in five years.

In July, BMPS announced a rescue plan to offload non-performing loans worth 27.6 billion euros into a separate entity, while seeking investors to inject new capital of up to 5.0 billion euros.

The bank said it hoped the planned recapitalization would come to fruition by year-end.

Member comments

Become a Member to leave a comment.Or login here.