Veneto Banca to tap investors for 500 mln euros - report

MILAN, March 26 Wed Mar 26, 2014 3:30am EDT

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MILAN, March 26 (Reuters) - Veneto Banca, one of 15 Italian banks under scrutiny in a euro zone-wide health check, will issue shares for 500 million euros ($687 million) and convert 350 million euros worth of bonds into stock to boost its capital base, the bank's top executive said.

In an interview with Italian financial daily Il Sole 24 Ore, Chief Executive Vincenzo Consoli also said the loss-making bank, which analysts say could be a takeover target for local rival Banca Popolare di Vicenza, would prefer to remain independent.

"Our industrial plan has a stand-alone perspective. We want to remain independent," said Consoli. "But we have the European Central Bank's asset quality review ahead of us, with its many uncertainties. We will see what happens."

The capital-boosting measures would help Veneto Banca lift its Common Equity Tier 1 ratio, a closely watched measure of a bank's financial strength, from 7 percent to 10.3 percent by July and above the lender's current target of 9.5 percent.

If the bank were to sell its around 70 percent in Banca Intermobiliare, this would add another 0.7 percent to its Common Equity Tier 1, Consoli said.

The European Central Bank, which is examining the quality and quantity of assets held by euro zone banks, has said lenders must set aside capital equivalent to at least 8 percent of their risk-weighted assets.

"Nearly all of Italy's largest banks have announced plans for a capital hike over the last few months," said Consoli. "We have carried out a careful assessment and in the end we have decided to take this step. We could not be left out."

Italian lenders, including Banca Monte dei Paschi di Siena and Banco Popolare, have unveiled plans to tap investors for more than 7 billion euros in the coming months.

Consoli said Veneto Banca planned to launch the share issue early in June with the aim of closing it by July-August.

The conversion of the bond would take place at the end of June, he added.

The manager said the bank would define the valuations for both transactions at a board meeting on April 8. ($1 = 0.7258 Euros) (Reporting by Lisa Jucca; Editing by Erica Billingham)

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