UPDATE 2-Italian bank UBI's offices searched, executives under investigation-sources
* CEO, two others under investigation-sources
* Bank CEO says confident everything will be sorted out
* Shares fall 1.8 pct
* UBI's Q1 profit nearly doubled, bad loans down (Adds details on investigation from sources)
ROME/MILAN, May 14 (Reuters) - Italian magistrates are investigating three top executives at Unione di Banche Italiane (UBI), Italy's fifth-biggest bank by branches, as part of a probe into alleged obstruction of regulators, four sources with knowledge of the situation said.
Tax police searched the offices of several managers at the bank's headquarters in the northern city of Bergamo early on Wednesday, two sources said.
The sources said UBI Chief Executive Victor Massiah as well as the chairmen of the bank's supervisory and management boards were placed under investigation.
Veteran Italian banker Giovanni Bazoli, chairman of the supervisory board of Intesa Sanpaolo, was also under investigation for alleged obstruction of regulators because of his role as chairman of a steering committee of an association of UBI shareholders, one of the sources said.
Intesa Sanpaolo declined to comment. Bazoli's lawyer said in a written statement that his client had committed no wrongdoing.
UBI said in a statement it was cooperating with the tax police and that the probes related to two complaints, one filed in 2012 by a consumer group, and the other by some members of the bank's supervisory board in 2013.
UBI said it had given answers and clarifications to the competent authorities at the time and no further development had since emerged.
In a conference call with analysts on UBI's first-quarter results, CEO Massiah said: "I am confident everything will be fixed and perfectly understood. It's an old story."
The bank's shares closed down 1.8 after earlier falling nearly 4 percent on the back of reports of the probe.
The November 2012 complaint by the head of Adusbef, a group that looks after consumer rights in financial services, alleged that UBI Leasing carried out fraudulent activities involving the sale of luxury boats, jets and buildings to people close to the company at prices below their market value, according to a statement on Adusbef's website.
The Bank of Italy last year fined former managers and board members of UBI Leasing 360,000 euros and alleged there were "failures in the organisation, in the internal checks and in the management of credit" at the company. Since then UBI has overhauled the unit's management.
The 2013 complaint concerned an alleged shareholder pact to influence the appointment of supervisory board members that was kept hidden from regulators, according to one of the sources.
According to one of the sources, there is also a parallel investigation centering on the bank's leasing unit into alleged fraud and violation of anti-money laundering rules.
A total of 15 people, including former managers at UBI Leasing, were under investigation in this probe, Corriere della Sera said on its website.
Also under investigation is Giampiero Pesenti, chairman of Italian cement maker Italcementi, the sources said. A company spokesman declined to comment.
The investigation overshadowed UBI's strong first-quarter results, which initially sent its shares up 1 percent.
"The results were good, it's the news of the searches that's hurting the stock," one Milan-based trader said.
The bank said its net profit for the three months more than doubled and its stock of bad debts, a sore point for banks in the euro zone's third biggest economy, edged down slightly.
Its net profit rose to 58.1 million euros ($79.6 million), up from 26.5 million euros in the same period last year and ahead of the consensus of analysts' forecasts of 53 million euros according to a survey distributed by the bank.
Writedowns on impaired loans were up 26 percent at 198.6 million euros from a year ago but the backlog of bad debts edged down by 15 million euros compared with end-2013, to a total of 12.65 billion euros.
UBI's core capital stood at around 10.5 percent of assets at the end of March, above the minimum requirement of 8 percent sought by the new euro zone banking regulator, the European Central Bank. (Additional reporting by Andrea Mandala, Paola Arosio, Stephen Jewkes, Stefano Rebaudo and Valentina Za; Writing by Silvia Aloisi; Editing by Greg Mahlich and Jane Merriman)