UPDATE 1-Banco Popolare issues profit warning on Q4 provisions

Mon Mar 4, 2013 4:06pm EST

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* Sees 2012 net loss of about 330 mln euros

* Analysts' view was for a loss of 46 mln euros

* Results hit by Agos losses, Q4 loan-loss provisions (Recasts lead, adds details throughout, background)

MILAN, March 4 (Reuters) - Italy's No. 4 lender Banco Popolare warned on Monday that it expected to post a much wider full-year loss than market expectations due to weak performance at a minority-owned unit and higher loan loss provisions in the fourth quarter.

In a statement, the bank said it now expected to post a net loss for 2012 of about 330 million euros ($429.31 million).

According to a view of 19 analyst forecasts posted on the bank's website, the expected net loss for 2012 was 46 mln euros.

"The difference (with market consensus) regards primarily the share of loss attributable to the group as a result of the performance of the associate Agos-Ducato and total loan loss provisions," it said.

The cooperative bank said consumer credit group Agos-Ducato, majority owned by France's Credit Agricole, was likely to post a higher than expected loss in the final quarter.

That would have a negative impact on its own consolidated fourth quarter results of about 100 million euros, it added.

The market had also underestimated the impact of the cost of credit in the fourth quarter "which based on the preliminary data ... should stand at a little more than 650 million euros", the bank said.

A prolonged and painful recession in Italy has driven up bad loans at its lenders, forcing them to set aside more cash to cover non-performing debt.

At the end of 2012 bad debts at Italian lenders rose to around 125 billion euros.

A slow economy and tougher liquidity rules are squeezing consumer lenders throughout Europe. But Italy has been hit particularly hard because of cut-throat competition as well as an economic slump which has pushed joblessness to multi-year highs. Problems at Agos Ducato triggered a Bank of Italy inspection in 2012.

Banco Popolare said that despite the estimates it confirmed a Core Tier 1 ratio above the minimum target set by the European Banking Association of 9 percent, including the sovereign capital buffer.

It also said it had a strong liquidity position. ($1 = 0.7687 euros) (Reporting By Stephen Jewkes; editing by Naomi O'Leary, Bernard Orr)

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