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TRANI, Italy, Jan 20 (Reuters) - The head of the supervisory board at Intesa Sanpaolo and a former chief executive are under investigation over a series of derivatives contracts sold by the bank to a businessman in southern Italy, a judicial source said on Monday.
The probe, which focuses on events dating back to 2004-08 and also involves 13 other employees of the bank at the time, alleges that Intesa made 100,000 euros ($135,600) in illicit profits from the trades, the source said.
Intesa, Italy's biggest retail bank, denied in a statement any allegations of wrongdoing and said it was fully cooperating with judicial authorities.
The investigation by magistrates in the southern city of Trani centres on interest rate swaps which prosecutors said Intesa sold to a businessman who had opened a 700,000 euro mortgage with the bank, the source said.
Among those under investigation for alleged fraud are Giovanni Bazoli, chairman of Intesa's supervisory board, and Corrado Passera, who stepped down as Intesa's CEO in 2011 to join Mario Monti's technocrat government as industry minister, the source added.
$1 = 0.7376 euros Reporting by Vincenzo Damiani, Writing by Silvia Aloisi, Editing by Paola Arosio and Mark Potter