Monte dei Paschi di Siena shares soar after board confirms it is pushing ahead with rescue plan
Shares in Italian lender Monte dei Paschi di Siena soared today after its board confirmed it was still pushing ahead with rescue plans to bolster its capital and ditch some of its soured loans.
In a statement released after the market closed last night, the bank noted its board had met to discuss the plans in more depth and intended to approve the final details on 24 October.
However, although Monte said it intended to go ahead with the JP Morgan-fronted plan to pump around €5bn (£4.5bn) of capital into the bank, it was still considering the fine print of an alternative plan proposed by former minister Corrado Passera.
Shares in the bank closed up 7.2 per cent at €0.21. However, that price is still more than 85 per cent lower than they were trading at this time last year.
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The Italian banking system has had a tough time lately. It is thought to be burdened with around €360bn in non-performing loans.
Meanwhile, Monte dei Paschi was the worst performing bank in the European Banking Authority's stress tests, published earlier this year, with the study showing the lender's capital would be wiped out in the event of a sharp economic downturn.