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Monte dei Paschi's last-ditch funding effort

Monday, December 19, 2016 - 01:12

Troubled Italian bank Monte dei Paschi makes a last-ditch attempt to raise 5 billion euros by the end of the year and avoid a state bailout. But as Ciara Lee reports, time is running out for the world's oldest bank to convince investors to back it.

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It needs to raise 5 billion euros by the end of the year to avoid a state bailout. But troubled Italian bank Monte dei Paschi isn't giving up. In a last-ditch funding effort it's to sell new shares between Monday and Thursday. The ECB has told Italy's third-largest lender to raise capital this year and offload 28 billion euros in bad loans. If successful, the share issue could raise up to 3.2 billion euros. But finding investors has proved difficult of late amid political turmoil and this month's change of government. (SOUNDBITE) INDEPENDENT MARKET ANALYST, DARREN SINDEN, SAYING: "Can they raise the money? No. I really don't think so. I mean I really don't think that if I were a Italian institutional investor or even an international institutional investor and want to put money into Monte dei Paschi. They're trying to raise almost ten times the current market cap, and that's really only going to be a sticking plaster on a major arterial wound." Italy is ready to step in to rescue the bank should the fundraising plan fail. Monte dei Paschi's announcement brought comfort to Italian government bond markets. 10-year bond yields fell 3.5 basis points in early trade, heading towards a the month low hit last week.

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Monte dei Paschi's last-ditch funding effort

Monday, December 19, 2016 - 01:12