* Bank is latest Italian lender to tap market
* Heavily discounted rights issue starts on Monday
* Bank says may need to book further loan loss charges
MILAN, June 14 Italian mid-sized bank Carige
, which is launching an 800-million euro rights issue
on Monday to bolster its financial strength, said it may be need
further capital-boosting measures, particularly in view of a
pan-European health check of lenders.
Carige is the latest Italian bank to tap markets for cash to
strengthen its balance sheet in preparation for the review of
banking assets across the euro zone, led by the European Central
Nine out of 15 Italian banks targeted by this year's
check-up are raising 10.8 billion euros in total.
In the prospectus for the rights issue, Carige - which is
also selling assets to raise its core capital - said it could
not rule out that the review may find a hole in its accounts.
"Should the results of the comprehensive assessment exercise
for Banca Carige highlight that the bank does not meet the
minimum capital criteria required by the ECB, the supervisor
authority could request the adoption of measures aimed at
plugging the capital deficit observed," said the prospectus,
posted on Carige's website on Saturday.
Carige said on Thursday it would offer new shares at a 40
percent discount to the theoretical stock price when excluding
subscription rights, offering 93 new shares for every 25 already
owned at 0.10 euros each.
The Genoa-based lender needs to bolster its best-quality
capital ratio, which stood at 5.1 percent at the end of 2013, to
bring it above an 8 percent minimum threshold set by the ECB.
The bank, which is being restructured under new management,
posted a 2013 net loss of 1.76 billion euros, hit by provisions
against risky loans and writedowns on past acquisitions.
In the prospectus it said it may have to set aside more
money to cover for loan loss charges, and that could affect its
future financial results and capital base.
The bank also said market regulator Consob - which has
challenged its financial statement for 2012 and the first half
of last year - was still examining its full-year 2013 accounts
to assess whether the accounting criteria used were correct.
In the prospectus the bank referred to the judicial probe
engulfing its former chairman Giovanni Berneschi, ousted in
2013. Berneschi was arrested last month along with six others on
suspicion they had forced the bank's insurance unit to buy
assets at an inflated price for their own profit, prosecutors
The bank, which considers itself the injured party in the
probe, said it could not rule out that the investigation could
widen and potentially lead to compensation claims against the
lender, although this was a "mere hypothesis".
Chief Executive Piero Montani took over last autumn after
the previous management was ousted following demands from
Italy's banking regulator.
(Reporting by Silvia Aloisi, editing by William Hardy)