The week of the Monte dei Paschi Stock Exchange starts in the worst way. In the opening, and for more than an hour, the stock failed to make money. At 12.27 the Mps shares, which entered into trading, collapsed by 8,79% to 1,345 euros.
At the basis of the negative performance there are the doubts expressed by the European Central Bank which, through a letter, expressed its fears on the ability of the Sienese institute to achieve the results of the restructuring plan.
The judgment of the ECB, contained in the excerpts of the letter written by the European banking supervisory authority to inform MPS of the decision on the request for capital requirements Srep. Above all, Eurotower stresses that MPS could fail to achieve “the objectives of the plan restructuring: improve profitability, lower than the plan objectives, and the capital position, weakened by the impossibility of issuing the second tranche of T2 bonds by the end of 2018 and by the direct and indirect impacts of the dynamics of the BTP-Bund spread, above all considering the significant exposure of MPS to Italian sovereign debt”.
Furthermore, the draft letter highlights the significant challenges posed by the restructuring plan on the funding side and on the bank's ability to successfully implement its funding strategy, given the turbulence that is taking place in the Italian markets.
To the fears of the ECB were added the words of the undersecretary to the presidency of the Council, Giancarlo Giorgetti, according to whom “We cannot turn a blind eye to credit problems. There is the Carige problem in the coming weeks maybe there will be a problem with Mps. Therefore, with great realism, I say that we have done a lot in political terms, but we are in an unfavorable economic situation throughout Europe”.
Giorgetti then hoped that within a few months Mps “will have solved all the problems; and if not, the government will have to take responsibility for it. There is no running away from the credit problem because when we talk about credit we are talking about corporate depositors, it's a complicated thing”. Therefore, he concluded, "net of responsibilities, it is a government responsibility".
The bad news for the Tuscan bank, however, is not over: Banca Akros has decided to cut its recommendation from "buy" to neutral".
(Last update: 12.27 pm on 14 January).
