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Italy's BPER will decided in coming weeks on possible cash call
March 6, 2014 / 11:22 AM / in 4 years

Italy's BPER will decided in coming weeks on possible cash call

MILAN, March 6 (Reuters) - Banca Popolare Emilia Romagna will consider over the coming weeks whether it needs to tap investors for cash to boost its capital base, the Italian bank’s chief executive said on Thursday.

The mid-tier lender, one of 15 Italian banks under scrutiny by the European Central Bank in a review of euro zone lenders, had a core tier 1 ratio of 8.6 percent at the end of last year.

The bank is awaiting approval from the Bank of Italy of internal rating models which will help it strengthen capital.

CEO Luigi Odorici said it was uncertain when this authorisation would be granted as Bank of Italy officials were very busy with the ECB’s asset-quality review (AQR).

“The AQR makes the validation process uncertain,” Odorici told analysts during a conference call.

“We’ll think about this over coming weeks and decide whether to continue to bet on the validation of the (internal rating) models or consider a capital increase, given that in 2014 it is necessary to have a capital ratio above the 8 percent regulatory threshold.”

The ECB wants banks in the review to have a common equity ratio - a stricter measure of bank capital than the core tier 1 - of at least 8 percent. (Reporting by Valentina Za and Andrea Mandala, editing by Isla Binnie)

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