Shares in BFF Bank SpA tumbled more than 6% Tuesday after Milan prosecutors opened a preliminary false-accounting investigation into the Italian lender, according to press reports. The probe, first reported by Milano Today and later Reuters, adds to mounting pressure on BFF after a series of accounting and supervisory issues since early February.

The investigation appears linked to a 2024 Bank of Italy inspection that challenged BFF's classification of public-sector exposures and its interpretation of days past due under new default definitions. It also follows the bank's February 2 restatement of its 2024 accounts, when BFF adjusted for an allocation error on about €54 million of pre-June 2023 factoring collections, resulting in a €14 million reduction in equity. Management described the issue as an operational allocation problem rather than missing cash.

BFF shares were temporarily halted Monday due to excessive volatility as news of the investigation circulated, reopening to close down about 12% that day. At current levels, the stock trades at about 4.5 times 2026 estimated earnings and implies a potential dividend yield of close to 20%, assuming distributions resume. Kepler Cheuvreux maintained a "hold" rating with a €5 target price despite the ongoing regulatory scrutiny.