Business News

LONDON, (APP/AFP) – Italy’s Banca Monte dei
Paschi di Siena came a distant last in EU bank stress test results
released on Friday that showed the sector as a whole was broadly
resilient.
BMPS would suffer a 14.23 percent plunge in its core capital
ratio — a measure of stability — by 2018 under the European
Banking Authority’s economic shock scenario.
That would bring the ratio for BMPS, the world’s oldest bank
and Italy’s third largest, down to minus 2.23 percent — the only
one of the 51 banks tested to end up in negative territory.
“The EBA’s 2016 stress test shows the benefits of the
capital strengthening done so far are reflected in the resilience
of the EU banking sector to a severe shock,” said Andrea Enria,
chair of the London-based EBA.
But he added: “This is not a clean bill of health”.
The announcement came shortly after BMPS’s board announced
a rescue plan for shifting the billions of euros (dollars) in bad
loans that have weighed down on the embattled lender, which was
founded in 1472.
Some analysts fear that the bank’s bad debts may trigger a
banking crisis in Italy and eurozone turmoil.
The second worst performer in the EBA tests — Allied Irish
Banks — would see a ratio fall of 8.47 percent.
Deutsche Bank, Germany’s top lender, would fall by 5.4 percent
and Royal Bank of Scotland by 7.46 percent.