Trading in the shares of Italy's No. 2 bank UniCredit (UNCFF)  was suspended three times on Monday, after the Milan institution slipped past several thresholds and at one point fell by more than 8% compared with Friday's closing price of €2.19 ($2.45) a share.

The selloff followed a start-of-the-day relief rally, as traders initially reacted positively to UniCredit's European Banking Authority stress-test scorecard and  a bailout agreement-in-principle at troubled peer Monte dei Paschi (BMDPF) (BMDPY) . Monte dei Paschi plans  a €5 billion ($5.6 billion) fundraising, and to hive off more than  €9 billion of non-performing loans.

However, some analysts also saw a read-across from the pricing of Monte Dei Paschi's non-performing loans at €0.33 on the euro under the terms of the bailout. UniCredit and other Italian banks with large NPL portfolios will likely find they have to take further write-downs on these already troubled assets.

Such write-downs will in turn mean that UniCredit and its peers may do less well in future stress tests, but according to analysts at Barclays, UniCredit is the most vulnerable. The lender emerged with a hypothetical common equity Tier One capital ratio of 7.10% under the "adverse scenario" concocted in the EBA stress tests.

UniCredit is currently attempting to dispose of both NPL portfolios and subsidiaries to raise capital, with reports suggesting it is on the verge of selling Polish lender Pekao as well as its domestic online lender FinecoBank. It recently announced an end to talks with Spain's Banco Santander about merging their asset management units, and said it will explore new options for its Pioneer Global Asset Management division.

By mid-afternoon, Monday, Unicredit was trading at €2.02 per share, down 7.5% on Friday's close.