MILAN, Sept 5 Italy's Banca Carige named
candidates to replace its current board of directors on
Thursday, saying it was committed to an overhaul demanded by the
Bank of Italy after an inspection.
Carige said the principal problems highlighted by the Bank
of Italy were exiting the insurance business, changing its
credit policy and strengthening its capital base.
The Bank of Italy had demanded the mid-sized bank appoint
new management to overhaul lending practices and shore up its
balance sheet, sources told Reuters on Tuesday.
The Italian regulator has been pushing smaller banks,
battered by the rising tide of non-performing loans during
Italy's longest recession since World War Two, to shore up their
balance sheets before the European Central Bank takes
supervision of the sector next year.
"A number of measures have already been taken and others are
being studied with a view to being carried out soon," the bank
said in a statement.
Banca Carige Spa, which has a market capitalisation of 1.1
billion euros ($1.44 billion) and needs to raise 800 million
euros by the end of this year to meet bank capital rules, said
it was fundamentally stable.
An Italian newspaper reported on Tuesday that a central bank
inspection showed "widespread inadequacies" at Carige, quoting a
letter signed by the head of the central bank.
The Genoa-based lender said it would take legal action
against whoever had leaked the letter from the Bank of Italy.
($1 = 0.7623 euros)
(Reporting By Isla Binnie; Editing by Eric Meijer)