BMPS announced its 10.6 billion euro liquidity position would only last four months on Wednesday, a significant drop from 11 months it had previously forecast. Shares in the lender were suspended after falling 6.75 percent after Thursday's open though pared some of its losses to trade 0.67 percent lower by mid-morning.
Should Italy's third largest bank admit defeat with its attempted rescue plan and ask Rome for assistance, the state bailout could take up to three months, according to a report from Italian newspaper Il Sole 24 Ore.
The lender has been struggling for a long time yet its problems were exacerbated at the start of December as a consequence of political instability in the shape of Italy's referendum result.
Citizens overwhelmingly rejected a package of constitutional reforms proposed by former Prime Minister Matteo Renzi on December 4 and with unexpected changes in government, investors appear to have become increasingly reluctant to contribute to the planned recapitalization process.
Shortly after the referendum result, the European Central Bank blocked an attempt from the ailing lender to have its deadline extended in order to allow more time to find major investors and fulfill a 5 billion euro cash injection.
"Here we are looking at an acceleration of the central bank's timing, particularly the European Central Bank, who rejected the request to delay until January 20 and what we have seen is probably the worst timing of all (for BMPS)," Gildas Surry, senior analyst at Axiom Alternative Investments told CNBC on Thursday.