BFF plummets 30% after central banks orders dividend halt

BFF Bank SpA

10/05/2024 10:18

** Shares in Italy's BFF Bank  BFF.MI  plunge more than 30%
after the Bank of Italy instructed the lender to halt dividend
and bonus payments following an inspection into how it was
classifying credits towards the state
    ** The stock was automatically halted from trading after
falling 32%; by 0915 GMT it was indicated down 40.7% 
    ** BFF said the central bank concluded that its method for
classifying state credits was not consistent with the European
Banking Authority's guidelines on how to apply the definition of
default, particularly regarding delayed payments
    ** "Although the credit quality is not under discussion,
Bank of Italy's ruling will probably bring a rise in RWA (risk
weighted assets) on part of its credit portfolio, thus a higher
absorption of capital," says Equita in a note
    ** "This... represents a risk not only on the short-term
capacity to distribute dividends, but also to pursue the same
growth trajectory with similar returns," adds the broker
    ** It cuts BFF's rating to "hold" and slashes its PT by 28%
to 10 euros
    ** If losses hold, the stock will see its worst day ever
    

 (Reporting bY Enrico Sciacovelli)