Banca Monte dei Paschi di Siena (BMPS) may have a strong future, Italy's prime minister told CNBC on Monday, in spite of the stricken lender receiving the bottom score in a Europe-wide stress test.
"My view is that Italian banks are good," Renzi told CNBC in Rome.
"There are some problems, yes. The first is Monte dei Paschi, we know. But Monte dei Paschi is also a great brand, the most ancient bank around Europe … If now, without NPLs (non-performing loans), with a clear strategy, I think this bank could be a very good bank for the future."
BMPS is the world's oldest bank and currently the third largest in Italy. It is struggling under a massive pile of bad debts. As expected, it fared poorly in the latest round of the European Banking Authority's (EBA) stress tests, the results of which were revealed on Friday.
The sector was once again front and center for investors on Tuesday morning. Shares of BMPS were down 7 percent and Unicredit tanked and was briefly suspended from trade over concerns about its bad loan portfolio.