Shares in Italian lender Monte dei Paschi di Siena rise 5 percent following a press report about possible bidders for 150-200 branches the bank is looking to sell in order to fill a capital shortfall.
The STOXX 600 euro zone banking index is up 0.5 percent.
Italian daily Il Sole 24 Ore reports Deutsche Bank and BNL-BNP Paribas may be looking at the sale of the MPS branches. Deutsche has no comment and BNL is not immediately available for a comment.
“Market consensus towards banking stocks in peripheral countries is so negative that even a tiny positive piece of news can boost a stock that was battered a lot like MPS,” an Italian trader says.
Mediobanca analysts say in a note that a sale of 175 branches would add around 35 basis points to the bank’s Core Tier 1 ratio, covering about 10 percent of the shortfall identified by the European Banking Authority.
MPS currently trades at less than 1 million euros per branch, according to Mediobanca’s estimates.
MPS must fill a 3.27 billion euro capital gap by the end of June to meet requirements se by the Europan Banking Authority. The bank’s board is meeting later on Tuesday. RM://firstname.lastname@example.org