* Shares shed 10 percent after wider-than-expected 2012 loss
* Bad loans rising; capital base weak
(Adds analyst comments)
MILAN, April 2 Shares in Banca Monte dei Paschi
di Siena plunged on Tuesday after Italy's third
biggest lender reported rising bad loans and a weak capital
In the first day of trading since the lender published 2012
results late on Thursday, the stock was repeatedly suspended for
It shed nearly 10 percent by 0918 GMT at 0.17 euros, its
lowest level since August last year, and was the biggest loser
in Italy's blue-chip FTSE MIB index.
The Tuscan bank posted a wider-than-expected 3.2 billion
euro ($4.1 billion) loss last year due to higher loan loss
charges and losses on risky derivatives trades carried out under
its previous management.
The lender, which received a 4 billion euro state bailout in
February, also reported a stock of gross problematic loans at
29.5 billion euros at the end of last year, up 1.3 billion euros
Analysts said that stripping out the impact of state aid,
its core Tier 1 ratio - a key measure of financial strength -
came in at just 6.9 percent - well below the 9 percent minimum
level required by European regulators.
"Based on the underlying numbers at this stage, MPS is
structurally loss-making," said Alberto Cordara at Bank of
America-Merrill Lynch in a note on Tuesday.
"We are unclear on how MPS can repay the state aid without
forcing its shareholders through capital initiatives involving
potentially significant dilution."
From this year, if Monte dei Paschi does not make enough
profit to pay interest in cash on the 4 billion euros of bonds
it issued to the Italian treasury, it will have to issue shares
to the treasury for an equivalent amount - paving the way for
Adding to the negative sentiment, the bank also said in a
document posted on its website late on Friday that customers'
deposits had fallen by "a few billion euros" after a scandal
over the derivatives trades erupted in late January.
Those trades, carried out in 2006-09, are at the heart of a
fraud investigation by prosecutors in Siena.
(Reporting By Silvia Aloisi; Editing by Lisa Jucca and Louise