(Corrects name of bank raising 1.5 bln euros in paragraph 3)
By Francesca Landini and Lisa Jucca
MILAN Jan 24 Two Italian mid-sized lenders came
under the spotlight on Friday as Banco Popolare
announced it would need a capital increase and Banca Popolare di
Milano's top investor sold his stake in the bank.
The announcements highlight the fragility of the country's
second-tier banks, some of which are grappling with soaring bad
loans as an Italian economic crisis hits small and medium
Banco Popolare said its board had approved a capital
increase worth up to 1.5 billion euros ($2.1 billion), adding it
had cut its outlook on 2013 results.
The Verona-based lender said it expected to post a net loss
of 600 million euros in 2013 mainly due to a surge in loan loss
provisions as the bank applied the European Banking Authority's
new accounting rules.
Banco Popolare's announcement comes as troubled lender Monte
dei Paschi di Siena readies its 3-bln-euros rights
Italian top bankers expect more banks to have to resort to
capital increases as the European Central Bank pushes ahead with
an asset quality review.
Banco Popolare's cash call will enable the bank to boost the
group's capital base, it said in a statement. It will also help
the lender redeem a soft mandatory convertible bond worth one
billion euros next March.
Both Banco Popolare and Banca Popolare di Milano are
cooperative lenders. This ownership structure can limit
shareholders control of top managers, the Bank of Italy said
last year, asking for a reform of this type of bank.
Pop Milano's top investor Andrea Bonomi, who spearheaded a
plan to turn the cooperative bank into a joint-stock company,
has sold his 8.6 stake on the market, a source close to the
matter said on Friday.
Bonomi, a private equity investor, wanted to change the
ownership structure of the lender but his plan was shelved at
the end of last year because of strong opposition by trade
Like Banco Popolare, Banca Popolare di Milano also needs to
boost its capital base with a 500 million euro capital increase
to be carried on later this year.
"For sure some banks will need some additional capital,"
Federico Ghizzoni, head of Italy's top lender UniCredit
said on Friday in an interview with Reuters TV, when
asked about the health of local mid-sized banks.
($1 = 0.7307 euros)