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Monte dei Paschi shares suspended after 23% fall

Monte dei Paschi Image copyright AFP
Image caption Before Tuesday, the bank's shares had lost almost 75% of their value since the beginning of the year

Shares in Italian bank Monte dei Paschi have been temporarily suspended from trading after plummeting 23%.

It came after the ailing lender published a make-or-break turnaround plan which initially caused the stock to rally by up to 26.5%.

Italy's third-largest bank said it would write down bad loans, lay off one in 10 of its workers and raise €5bn (£4.4bn).

The European Central Bank had ordered it to reduce its bad debt in April.

"There is a lot of speculation ahead of the bank's plan... amid rumours and leaks of possible interest of new investors in the bank," Vincenzo Longo, a strategist for IG Markets in Milan, told Bloomberg.

"We will soon discover if the plan is achievable and sustainable."

Concerns are mounting over Italian banks, many of which are weighed down by massive bad debts and thought to be a risk to the wider economy.

Four lenders were bailed out by investors last December and the government is seeking similar solutions for others.

Monte dei Paschi is one of the banks at the centre of the crisis, having been deemed Europe's worst-capitalised bank in recent EU stress tests.

On Tuesday, it reported a net loss of €1.15bn for its third quarter, compared with a net profit of €255.8m for the same quarter of last year.

That was largely due to €1.3bn in provisions for bad loans it booked in the period.

Before Tuesday, the bank's shares had lost almost 75% of their value since the beginning of the year.

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