Banca Popolare di Milano Scrl, one of 15 Italian lenders included in the European Central Bank’s review of euro-zone bank books, plunged in Milan after shareholders rejected governance changes.
Popolare di Milano was down 10 percent to 62.15 cents at 11:21 a.m., the biggest intraday drop since May 29, 2012, giving the bank a market value of 2.01 billion euros ($2.8 billion).
Chief Executive Officer Giuseppe Castagna’s proposal to give institutional investors greater say in the cooperative bank failed to get the required two-thirds of votes at the April 12 annual group meeting in Milan.
“We see the delay and the complication that the AGM decision implies, as negative,” Jean-Francois Neuez and Willis Palermo, analysts at Goldman Sachs Group Inc., wrote in a note today. “This news will have a negative impact on the shares.”
The Bank of Italy pressed for changes in governance at Popolare di Milano after unions and employees forced previous executives to abandon plans to transform the bank into a joint-stock company. Popolare di Milano will launch a 500 million-euro share sale in May to boost capital as the ECB reviews the quality of its assets.