Pop Milano expects Bank of Italy to remove add-ons - CEO
MILAN, March 12
MILAN, March 12 (Reuters) - Banca Popolare di Milano expects the Bank of Italy to remove an additional risk-weighting of assets it has imposed on the cooperative bank and will not pay a dividend over the next few years if that were not the case.
Chief Executive Giuseppe Castagna told analysts on Wednesday that there had been "intense talks" with the central bank over governance changes, a new business plan and a rights issue - the three elements to which the regulator had pinned the cancellation of the so-called 'add-ons.'
"We believe there is a very high probability we can achieve the removal of the add-ons," Castagna said during a conference call.
He said Pop Milano would not pay a dividend over the course of its new business plan if the Bank of Italy did not allow it to remove the add-ons.
The cooperative bank said on Tuesday it was targeting a common equity ratio of around 12 percent in 2016 from 7.1 percent at the end of last year.
The bank said in slides posted on its website on Wednesday a planned 500 million euros rights issue would add 1.3 percentage points to its best-quality capital with a further 1.8 points expected from the removal of the add-ons. (Reporting by Valentina Za; Editing by Lisa Jucca)
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