Back in purgatory

5 December 2016 By Neil Unmack Follow @unmack1

The failed referendum need not cause a crisis if UniCredit completes its rights issue and fellow lender MPS can be quickly stabilised. Political turmoil and weak growth, though, could push up bad loan levels. A new “bad bank” would help, but political will may be lacking.

This content is for Subscribers only

Context News

Italian Prime Minister Matteo Renzi said he would resign after Italians voted against his constitutional reforms in a Dec. 4 referendum.

Investment banks were set to decide on Dec.5 whether to proceed with a recapitalisation for Banca Monte dei Paschi di Siena, which seeks to raise 5 billion euros through a debt swap and new equity.

UniCredit, another Italian lender, is seeking to raise up to 13 billion euros through a share sale, as well as further funds through asset sales.

The FTSE Italia All-share Bank Index lost 2.26 percent as of 1045 GMT.

Email a friend

Please complete the form below.

Required fields *