(Adds details, UBI no comment, context)
By Maria Pia Quaglia
MILAN Dec 29 Italian bank bailout fund Atlante
has presented an offer for two-thirds of the 3.7 billion euros
($4 billion) of gross problematic loans of three small banks
that were rescued last year, two sources close to the matter
The move should help facilitate the sale of the banks -
Banca Etruria, Banca Marche and CariChieti - to bigger rival and
Italy's fifth-largest lender UBI.
"Atlante today presented an offer for the non-performing
loans of the three good banks," one of the sources said.
A third source added that the banks' boards may meet on
Friday to discuss the Atlante deal.
In November 2015, Italy rescued the three small lenders and
a fourth, CariFerrara, by drawing nearly 4 billion euros from a
crisis fund paid for by its healthy banks. The value of junior
bonds and shares in the banks was written off in line with
European rules for dealing with bank crises.
Italy has struggled to sell the four banks as required by
European regulators even though their weakest non-performing
loans were spun off in the rescue. Since then the banks have
been forced to class more problem loans as defaulting.
The small lenders have turned into the latest banking
headache for Italy's government, which has already been called
to the rescue of the world's oldest bank, Monte dei Paschi di
Siena, after its plan to raise 5 billion euros from
private investors flopped.
UBI has expressed interest in buying three of the lenders,
but set conditions including for the banks' new non-performing
loans to be taken off their balance sheets and the option to use
its own internal risk models to weigh the lenders' assets.
The resolution fund which owns the banks is also expected to
carry out a small share sale to bolster their capital ratios.
Once all conditions are fulfilled, UBI would launch its own
small cash call to ensure its core capital is not hit by the
The sale to UBI is unlikely to be completed by the end of
the year as had initially been expected.
"There are still legal issues to be ironed out, so UBI's
signature is expected after the Epiphany (Jan. 6 holiday)," one
of the sources said.
UBI, whose board was meeting on the matter on Thursday,
declined to comment.
When the main banking unions met Roberto Nicastro, who acts
as president of the four banks until they are sold, in early
December, he expected a preliminary sale agreement to be signed
this year, with closing expected by March 2017.
The deadline for the sale, initially set for April 2016, has
already been extended twice.
(Reporting by Maria Pia Quaglia, writing by Agnieszka Flak;
Editing by Ruth Pitchford)