(Bloomberg) -- BFF Bank SpA plunged the most in two years after the Bank of Italy ordered a temporary halt on “profit distribution” and expansion abroad as a result of a probe into the Italian specialty finance company.

The firm received requests from the central bank on April 29, after a Bank of Italy inspection questioned the classification of the bank’s credit exposure toward state bodies, the lender’s governance and its corporate compensation practices, according to a statement on Thursday.

The limitation on distribution of profits or other equity assets does not apply to the payment of interest on additional Tier 1 securities, BFF said, adding it will respond in July with its assessments.

The shares fell as much as 10% before being suspended, their biggest intraday decline since April 2022. BFF Bank notes due March 2029 dropped 1.7 cents on the euro to 98.2 cents, according to data compiled by Bloomberg.

BFF is a finance company specialized in management and acquisition of debt owed to suppliers by public-sector bodies, as well as factoring, securities services and corporate payments. It operates in Italy, Croatia, the Czech Republic, France, Greece, Poland, Portugal, Slovakia and Spain.

The company’s board said that the possible increase in risk-weighted assets and prudential calendar provisioning does not result in a “material change” to the bank’s economic and financial outlook. 

The bank doesn’t see a change in its dividend policy nor in its profitability due to the probe, Chief Executive Officer Massimiliano Belingheri said during a conference call with analysts. 

--With assistance from Luca Casiraghi.

(Updates with CEO comments from fifth paragraph.)

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