Moody’s downgrades world’s oldest bank to ‘junk’

The headquarters of the Monte Dei paschi di Siena bank on October 5, 2012 in Siena, in the Italian region of Tuscany. Moody's credit rating has downgraded the world's oldest bank, Italy's Banca Monte dei Paschi di Siena, to "junk" status on worries government recapitalisation plans will prove insufficient.

Moody’s credit rating agency on Thursday downgraded the world’s oldest bank, Italy’s Banca Monte dei Paschi di Siena, to “junk” status on worries government recapitalisation plans will prove insufficient.

The lowering of BMPS’s rating by two notches to “Baaa3”, a non-investment grade, reflects Moody’s view that “there remains a material probability that the bank will need to seek further external support,” the agency said.

Critically exposed to the eurozone debt crisis, in June BMPS was forced to accept a government bailout, borrowing roughly 1.5 billion euros ($1.87 billion) in order to pay off debt and shore up its capital.

The bank has also said it would reduce its workforce by 4,600 people by 2015.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s