MILAN: Shares in Banca Monte dei Paschi di Siena fell as much as 4.5 percent in early trade on Monday as traders said the capital raising needs of the troubled Italian bank and its weak balance sheet continued to hurt its stock.
MPS Chairman Alessandro Profumo told an Austrian newspaper at the weekend that the bank expects to complete its planned capital increase by July and can use divestment to help plug a hole in its balance sheet.
Monte Paschi plans to raise up to 2.5 billion euros ($3.06 billion) from investors to shore up its capital base following this year's euro zone health check of European banks.
"The upcoming cash call is probably weighing on the shares," one Milan-based trader said.
A second trader said Monte Paschi was expected to book further loan writedowns in the last quarter. Profumo was quoted as saying that the bank would continue to suffer also in 2015 from bad loans.
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