Monte dei Paschi di Siena shares rise by double figures as investors await news of rescue plan
The share price for embattled Italian lender Monte dei Paschi di Siena has rocketed by double digits this morning, as investors wait to hear more about the bank's bailout deal.
Shares had risen 23.3 per cent to €0.33 by just before 3pm London time, the highest price they have traded at in over two months.
The bank's share price has been rallying ever since its board confirmed last week it was planning to push ahead with JP Morgan-fronted rescue plans which would boost capital by €5bn (£4.5bn) and ditch some of its soured loans. According to a notice issued by the board last week, details on those plans are expected to be finalised today.
The bank is also due to host a presentation on its business plan and its third quarter results tomorrow morning.
However, Monte's shares are still trading roughly 80 per cent lower than they were this time last year.
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The Italian banking system has come under the spotlight for the wrong reasons recently. It is thought to be burdened with around €360bn in non-performing loans.
It was also widely speculated Italian Prime Minister Matteo Renzi locked horns with the European Commission over the summer, as he tried to arrange a capital injection for the banking sector, even through this would technically involve circumventing EU rules.
Monte dei Paschi was also the worst performing bank in this year's European Banking Authority stress tests, with the study showing the lender's capital could be entirely eroded by a sharp economic downturn.