ROME, Jan 27 (AFP): Shares in Italy's Banco Popolare plunged on the Milan stock exchange on Monday, dragging other bank shares down, after it announced an unexpected capital increase.
The bank's shares on the FTSE Mib were down 12.67 per cent in mid-day trading.
Banco Popolare stunned investors late on Friday by announcing plans for a 1.5 billion-euro ($2.05 billion) rights issue and warning that it expected a net loss of about 600 million euros ($821 million) in 2013 owing to loan write-downs.
The bank is one of 15 Italian banks under scrutiny from the European Central Bank in its stress tests of leading eurozone banks under new powers as part of a banking union framework.
According to the Repubblica daily, other Italian banks may follow Banco Popolare's move and tap investors for cash ahead of the health check.
The head of Italy's ABI banking association, Antonio Patuelli, told the paper he was "convinced" that the country's banking system was solid and "the banks who need capital increases will succeed."
Banco Popolare shares plunge on surprise recapitalisation
FE Team | Published: January 28, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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