New BPM CEO says cash call only after governance changes-paper

MILAN Fri Jan 24, 2014 3:26am EST

Related Topics

MILAN Jan 24 (Reuters) - Banca Popolare di Milano (BPM) will launch a planned cash call only after approving a new business plan and governance changes requested by the Bank of Italy, the chief executive of the Italian cooperative lender was quoted as saying on Friday.

"To tap the market we first need to approve 2013 results, draw up the three-year plan and change the governance structure in accordance with what the market itself, besides regulators, is asking for," newly-appointed CEO Giuseppe Castagna told financial daily Il Sole 24 Ore.

BPM last Friday chose veteran banker Castagna as its new chief executive. He was formally appointed this week.

The Bank of Italy is urging cooperative lenders like BPM to reform in order to give shareholders powers that better reflect the size of their stakes.

"I believe we need some changes to our bylaws, mainly to give institutional investors the weight they deserve and allow them to bet on us without being penalised," Castagna, formerly at Intesa Sanpaolo, said.

BPM needs to raise fresh capital to reimburse 500 million euros ($684 million) in state aid. Its governance reform and fundraising plans suffered a setback when former CEO Piero Montani left in October after a clash with the bank's supervisory board.

Shares in BPM were up 1 percent by 0813 GMT against a flat European banking stock index. ($1 = 0.7310 euros) (Reporting by Valentina Za; Editing by David Holmes)

FILED UNDER: