Shares in Monte Paschi fall 4.7 percent as cap hike seen soon

MILAN (Reuters) - Shares in Banca Monte dei Paschi di Siena were suspended from trading on Monday after heavy falls amid speculation the troubled lender could soon launch a planned capital increase.

"It looks that the timing of the capital increase is near," a trader said.

Another trader said disagreements between the bank and its biggest shareholder over the timing of the cash call were also weighing on the shares. The banking foundation, which owns 37.5 percent of the Siena-based bank, said last week a capital increase in January would not be a welcome move.

The scandal-hit bank must carry out a capital increase of 2.5 billion euros ($3.38 billion) by the end of 2014 as part of a tough restructuring plan requested by the European Commission as a condition for approving a state bailout.

Italian newspapers also speculated the size of the capital increase could be raised to 3 billion euros.

The stock was down 4.73 percent at 0.20 euros before trading was suspended.

(Reporting by Gianluca Semeraro and Agnieszka Flak, editing by Danilo Masoni)