S&P downgrades world's oldest bank to junk

Standard & Poor's on Wednesday cut its credit rating for troubled Italian bank Monte dei Paschi di Siena -- the world's oldest surviving lender -- to speculative-grade status of BB+ from BBB-.

The ratings agency said it was also placing the bank on negative outlook.

"Deteriorating trends in Banca Monte dei Paschi di Siena's financial position make it unlikely that the bank would restore profitability and improve its capital and funding position in line with our previous expectations.

"The difficult economic and operating environment we anticipate in the Italian market will compound the challenges for MPS to implement successfully its business plan," the agency said in a statement.

The ratings agency said the bank's profitability could continue to be under pressure through 2013 despite its efforts to reduce costs. Read more >>