Reuters: Global Markets: Monte Paschi shares gain after state aid hurdle cleared

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Monte Paschi shares gain after state aid hurdle cleared Feb 22nd 2013, 11:05 Tweet Share this Email Print Related News Italy court rejects attempt to block Monte Paschi bailout 4:02am EST UPDATE 4-Monte Paschi's former finance chief held in Italy Thu, Feb 14 2013 Bank of Italy seeks more powers in wake of Monte Paschi troubles Sat, Feb 9 2013 ECB's Draghi defends his oversight of Monte Paschi Thu, Feb 7 2013 Bank of Italy gave Monte Paschi 2 billion loan in 2011: BOI source Thu, Feb 7 2013 Analysis & Opinion RBS share giveaway: a shareholder writes The Bundesbank isn’t mad Related Topics Hot Stocks » Asian Markets » The entrance of Monte Dei Paschi bank headquarters is pictured in Siena January 24, 2013. Credit: Reuters/Stefano Rellandini By Francesca Landini and Virginia Alimenti MILAN/ROME | Fri Feb 22, 2013 6:05am EST MILAN/ROME (Reuters) - An Italian court has rejected a request by a consumer watchdog to block a 3.9 billion-euro ($5.16 billion) bailout plan for Banca Monte dei Paschi di Siena (BMPS.MI), pushing the bank's shares higher on Friday. The decision removes a hurdle for Monte Paschi, which badly needs the state funds to restore its capital base and plug a hole from derivative losses. Italy's third-largest bank, the target of a high-profile judicial probe into possible fraud and bribery, is expected to receive the state aid in the form of special bonds sold to the Italian Treasury by the end of next week. In its verdict, the Rome administrative court rejected the bid by consumer rights association Codacons to have the loans blocked on the grounds that the bailout was harmful to Italy. Codacons, which wants the world's oldest bank to be nationalized, had said the state aid plan could end up damaging the bank it was trying to help and also "the whole country". But the court said "this prospect ... appeared vague and merely hypothetical". At 0954 GMT, shares in the bank were up 2 percent, overperforming a European banking index .SX7P which was up 0.9 percent. Mediobanca analysts said in a research note that they were "not surprised by the ruling of the regional court, as the issuance of state support is the only means to improve the regulatory capital ratios of Monte dei Paschi". Codacons may still appeal the regional court's decision. Monte dei Paschi was the only large Italian bank to fail to meet strict bank capital requirements set out by the European Banking Authority last June. ($1 = 0.7563 euros) (Writing by Lisa Jucca; Additional reporting by Naomi O'Leary; Editing by Tom Pfeiffer) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints Comments (0) This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

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