Italy's Banco Popolare posts third annual loss in a row

MILAN Fri Feb 28, 2014 3:40am EST

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MILAN Feb 28 (Reuters) - Italy's No. 4 lender, Banco Popolare, posted a full-year net loss of 606 million euros ($829 million) for 2013 after heavy writedowns on bad debts, it said on Friday.

It was the third straight annual loss for the lender, which has already announced a 1.5 billion euros capital increase to be launched in April.

Banco Popolare, one of 15 Italian banks being scrutinised by the European Central Bank, had warned at the end of January that it would end 2013 with a loss of around 600 million euros due to high loan loss charges.

It said on Friday that it had booked loan loss provisions of 1.69 billion euros for 2013, of which around 1 billion euros in the fourth quarter alone.

Bad loans have become the number one problem for Italian banks after the euro zone's third biggest economy suffered its longest recession since 1945.

The bank, the first Italian major lender to report annual results, said that including the capital increase its Common Equity Tier 1 ratio, a measure of financial strength, stood at 10.8 percent - above the minimum 8 percent threshold set by the ECB.

In 2012, the bank had lost 627 million euros.

($1 = 0.7309 euros) (Reporting by Silvia Aloisi, editing by Stephen Jewkes)

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