Monte dei Paschi formally approves its €5bn rescue package

 
Emma Haslett
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ITALY-ECONOMY-BANK
The lender was the worst performer in European Banking Authority stress tests this summer (Source: Getty)

Shareholders in troubled Italian bank Monte dei Paschi had a lukewarm reaction after reports suggested it had formally approved a multi-billion euro rescue package.

Shares were up more than two per cent in afternoon trading, at €20.48 - although they started to fall on the news.

The lender's shares have suffered in recent weeks after the departure of Prime Minister Matteo Renzi threatened to destabilise a deal - but Reuters reported today that the bank had formally approved a last-ditch attempt to raise €5bn through a debt swap and share issue.

According to the report, the minimum price for the share sale will be one euro per share.

The lender, which this summer was the worst-performing bank in European Banking Authority stress tests, is thought to be burdened with €360bn of non-performing loans.

Yesterday Italy's All-Share banking index slid after Moody's downgraded its outlook on Italian banks to negative, due to "increasing capital needs and weakening confidence".

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