Italian banking stocks are going crazy on Friday — leading Italy’s benchmark FTSE MIB index higher — after reports that the Italian government could step in to shore up the country’s banking sector.
Shares in all of Italy’s banks are up substantially on the day, as sentiment surrounding the country’s stricken banking industry seems to be turning slightly upwards.
Banks in Italy have been getting crushed since the start of 2016, as fears about weaknesses in the country’s banking system, and the levels of bad debt held by the banks.
However, this week the Italian government and chief executives from banks met with the aim of finding a solution to the banking system’s issues.
As part of that, Italy is considering setting up a state-backed fund that would help troubled lenders by buying up bad loans and plugging capital shortfalls, Reuters reported on Wednesday, citing three separate sources.
Leading the gains on the day is Banca Popolare Emilia Romagna, which is up more than 13%, closely followed by Banco Popolare Societa Cooperativa, the other bank to gain more than 10% on the day. Here’s how shares in both looked just after 2:15 p.m. BST (9:15 a.m. ET):
Here’s the scoreboard for the rest of the country’s banks:
- Unicredit — up 8.65%
- Intesa Sanpaolo — up 6.01%
- Banca Monte dei Paschi Siena — up 7.2%
- Banca di Milano Scarl — up 7.51%
- UBI Banca — up 8.97%
The banks gains have in turn helped drag the FTSE MIB up massively, and the index has gained more than 3.6% on the day, by far the best performing index on the continent. Here’s how that looks:
However, it isn’t just Italy where bank stocks are popping. In Britain, RBS, Lloyds, and Barclays are up 2.03%, 1.65%, and 2.65% respectively, while in Germany, Deutsche Bank is up 2.5% and Commerzbank 3.3%.