Veneto Banca to discuss capital raising plans on Tuesday-sources

Tue Mar 4, 2014 11:13am EST

Related Topics

* Rights issue among options to boost capital - sources

* Board yet to approve bond conversion

* Bidders doing due diligence on private banking unit - source

MILAN, March 4 (Reuters) - Italian mid-sized lender Veneto Banca will discuss a possible rights issue among options to boost its capital base above regulatory thresholds at a board meeting later on Tuesday, sources close to the matter told Reuters.

The unlisted lender is one of 15 Italian banks under scrutiny in a review the European Central Bank (ECB) is carrying out across the euro zone before taking on supervision of the sector from national regulators in November.

Veneto Banca's common equity, a measure of loss-absorbing bank capital, stood at 7.2 percent of risk-weighted assets at the end of December, below an 8 percent minimum requirement set by the ECB for banks in the review.

The bank targets a common equity ratio of 9.5 percent by mid-2014.

It had said it would convert a 350 million euro ($482 million) bond into equity to add around 1.35 percentage points to its core capital. The board was due to approve the conversion in February but it has not done so yet.

"The bank is looking at different options," one of the sources said, listing a rights issue among the possibilities.

A second source said a share sale was likely to be approved while the bank continued to weigh other options including the bond conversion and an asset sale.

Veneto Banca is trying to sell a 71 percent stake in listed unit Banca Intermobiliare, a deal which would provide a further capital boost of around one percentage point.

The second source said a Jan. 24 deadline had passed to submit non-binding offers and potential bidders were now conducting their due diligence on the private banking unit.

Six Italian lenders among those under scrutiny by the ECB are planning to tap investors for a total of more than 7 billion euros.

($1 = 0.7260 euros) (Reporting by Valentina Za; Additional reporting by Andrea Mandala; Editing by Mark Potter)

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