Italy's BMPS Worst Performer In EU Bank Stress Tests


Italy's BMPS worst performer in EU bank stress tests

LONDON, (UrduPoint / Pakistan Point News - 30th july,2016) - 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.