09:08

Shares in the world’s oldest bank - Banca Monte dei Paschi di Siena - have fallen after the vote, writes the Guardian’s city editor Jill Treanor.

Investors in MPS, which was founded in 1472, fear the resignation of Matteo Renzi as prime minister will affect attempts to clinch a €5bn (£4.2bn) lifeline from investors by the end of the year. The shares plunged 10% before recovering some losses. They were trading 3% lower at around midday in London.

Concerns about MPS were raised during the stress tests on the sector by the European Banking Authority in July, when the bank was ranked as the weakest of the 51 European institutions subjected to the annual assessment.

A consortium led by JP Morgan, the Wall Street investment bank, is reportedly meeting to discuss the fundraising. There were also reports that Monte dei Paschi bank officials will meet the Qatar Investment Authority – the gulf state’s sovereign wealth fund – to try to secure backing from a key investor.

Even so, there are expectations that the Italian government will need to prop up the bank, despite new EU rules which prevent state aid unless bondholders have been forced to take losses.

Alberto Chiandetti, a manager at the Fidelity European Opportunities and Fidelity Funds Italy investment funds, said: “The focus is on whether an anchor investor will materialise or not. If not, Monte Paschi needs a plan B and in that scenario, bank shares are likely to suffer most. We should know [on Monday] whether such an anchor investor exists for Monte Paschi.”



The prospects of a capital injection for MPS being found entirely from private investors appeared to be receding, analysts said. “I think a precautionary recapitalisation is ultimately still probable as a private sector-only solution is now highly unlikely to work,” said Mujtaba Rahman, managing director of Eurasia Group.