ML-Implode News - Monte Paschi Capital Wiped Out in European Bank Stress Test; Will Raise More Capital

Monte Paschi's common equity tier 1 capital ratio, a measure of its resilience, dropped to a negative 2.2 percent in the adverse economic scenario, according to the results of the test, which put lenders through a simulation of a severe recession over three years. UniCredit SpA's ratio fell to 7.1 percent, as measured under fully-loaded capital rules, the second-worst result of the five Italian lenders being examined.
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Monte Paschi Friday approved a plan to tap investors for the third time in two years by selling up to 5 billion euros in stock to replenish capital, more than five times its current market value, contingent on the planned disposal of its entire bad-loan portfolio.
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Italy had sought European approval to inject taxpayer funds into Monte Paschi, but the nation's treasury, also said Friday that there was no need for such an intervention, though it had discussed potential options with the European Commission that would be compatible with state-aid rules.

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Monte Paschi Capital Wiped Out in European Bank Stress Test; Will Raise More Capital