Italy's FTSE MIB Extends Losses in Early Trading as Banks Tumble
February 11 2016 - 4:09AM
Dow Jones News
By Liam Moloney
ROME--Milan's FTSE Mib posts strong losses in early trading
Thursday as the rout of bank stocks seen earlier in the week
returned, causing a raft of trading suspensions.
"There's a lot of volatility out there on concern over the
growth of the global economies and financial companies are taking
the brunt," said a trader in Milan.
FTSE Mib was down 5% at 15893, returning to 2013 lows, at 0918
GMT.
UBI fell 17%, before being temporarily suspended, after
reporting lower-than-expected earnings, especially for net interest
income.
Mediobanca shares were also temporarily suspended, down 9.6%,
after reporting lower second-quarter net profit.
UniCredit shares are also suspended after falling 7.4%
Banca Monte dei Paschi di Siena and Intesa Sanpaolo slid 6.5%
and 5.9% respectively.
After having lost in some cases more than 40% of their market
value since the beginning of the year, Italian banking stocks
staged a rebound on Wednesday.
In late January, the Italian government struck an agreement with
the European Union over a mechanism to deal with the high level of
bad loans in the country's banks, which late Wednesday it approved
as national law.
There is concern the mechanism will mean banks will suffer
losses if they adhere to it as it will mean pricing the debt at
market value.
Latest figures from the Bank of Italy showed bad loans at
Italian banks are persistently high, including those net of banks'
provisions.
Giovanni Legorano contributed to this article.
Write to Liam Moloney at liam.moloney@wsj.com
(END) Dow Jones Newswires
February 11, 2016 04:54 ET (09:54 GMT)
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