Italian prosecutors are investigating derivative trades made by five of the country’s biggest banks, judicial sources said on Friday, as part of an investigation that began at least a year ago before the current Monte dei Paschi scandal erupted.
Banca Monte dei Paschi di Siena, UniCredit SpA, Intesa Sanpaolo SpA, BNL and Credem Banca are being investigated by a court in Trani, a small town on the southeastern coast of Italy, over derivative trades, judicial sources told Reuters.
Intesa said the probe dated back to 2010 and concerned its Banco di Napoli unit. It said the deals involved were “negligible” and had no material impact on group financials.
The probe is unrelated to a scandal that broke last week involving Monte dei Paschi, the world’s oldest bank, after it was revealed that opaque derivatives contracts left the lender facing losses of €720-million ($984-million U.S.).
Since last week, prosecutors from three cities have launched investigations into possible fraud or lack of oversight at Monte dei Paschi, sparking concern by President Giorgio Napolitano, who warned on Friday that the national interest was at stake.
The Trani probe was opened at least as much as a year ago following a complaint by a client, but the names of three of the banks involved were revealed only on Friday.
The investigation is also looking at possible fixing of Euribor, the euro-priced counterpart of Libor, hit by a fixing scandal last year when derivatives traders at Barclays were found to have attempted to rig the key London lending rate.
Dozens of people are being investigated for suspected usury and fraud, the sources said.
Regional prosecutors in Italy often launch their own investigations in response to complaints from local individuals or institutions affected by alleged wrongdoings that have taken place elsewhere in the country.
Monte dei Paschi shares closed down 5.9 per cent, UniCredit down 2.6 per cent and Intesa Sanpaolo down 2.9 per cent compared with a 0.7-per-cent decline of the benchmark FTSE MIB index.
Spokespeople at Monte dei Paschi, BNL owner BNP Paribas and Credem had no immediate comment.
“At the moment, we are not aware of any probes in Trani,” an UniCredit spokesman said.
The Monte dei Paschi scandal has jumped to the top of the political agenda only weeks before Italians go to the polls in a general election on Feb. 24-25, in part because it is depending on state aid to lift its capital.
Trani prosecutors opened a separate probe on Wednesday investigating if the central bank and equities market watchdog Consob failed to properly oversee Monte dei Paschi after a consumer group requested that magistrates look into the affair.
As proof of the growing alarm over the damage which the Monte Paschi case could cause to the country’s image with international investors, Mr. Napolitano warned that the national interests were at stake in an interview in Friday’s edition of business daily Il Sole 24 Ore.
He also defended the Bank of Italy regulation of Monte dei Paschi.
“It scrupulously documented how, from the very beginning and with its traditional rigour, the Bank of Italy exercised its supervisory functions within the limits of the powers given to it by the law,” he told the newspaper.
The president said that it was necessary to bring clarity to the affair while adding that all sides “should be aware of the national interest.”
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