(Repeats Sunday story with no changes to text)
* Italy's No.4 bank announced 1.5 bln euro cash call
* Monte Paschi, BPM, Carige planning first-half rights
* Bad loans a systemic problem for Italian banks
* Rush to pre-empt ECB could hit some fundraising plans
By Valentina Za and Andrea Mandala
MILAN, Jan 26 Banco Popolare has
joined the queue of Italian lenders planning to tap investors
for cash to repair loan-ravaged balance sheets before results
are announced from a Europe-wide sector health check.
The move by Italy's fourth-largest bank could hit the
fundraising plans of rival lenders as competition to attract
investors increases amid concerns that higher than expected
loan losses could require further recapitalisation.
The surprise announcement on Friday that Banco Popolare is
planning a 1.5 billion euro ($2.05 billion) rights issue lifts
to about 6 billion euros the total being raised among 15 Italian
banks under scrutiny from the European Central Bank (ECB) in its
Profit-sapping loan losses have continued to afflict Italian
banks even as the country's longest postwar recession began to
recede at the end of last year, prompting the Bank of Italy to
demand that lenders boost provisions and beef up capital before
the ECB's check-up this year.
Italy's No.3 bank Monte dei Paschi di Siena must
raise 3 billion euros to repay state aid and stave off
nationalisation. Its top shareholder forced it to delay the cash
call to mid-May, sinking management plans to launch in January
before the rush to the market begins.
Smaller peers Banca Popolare di Milano (BPM) and
Carige must also tap investors in the coming months.
Unlisted Veneto Banca, meanwhile, says that a planned
conversion of debt into equity and asset sales should boost its
core capital ratio above the 8 percent target set by the ECB.
Banco Popolare said late on Friday that UBS and
Mediobanca would guarantee the cash call, with
shareholder approval expected by March. Sunday's Il Sole 24 Ore
newsapaper reported that the move could prompt Carige to bring
forward its own fundraising.
Carige declined to comment but an Italian banker who asked
to remain anonymous said: "Everyone's main worry is about
hitting the market in late spring when there will be other
rights issues and all eyes will be on Monte Paschi."
Analysts say that, like Banco Popolare, other banks may have
stepped up loan writedowns in the fourth quarter ahead of an
end-December snapshot of balance sheets that the ECB will use in
"Bad loans are a systemic problems for Italian banks and a
key variable for the size of additional capital needs," said one
Milan-based banking analyst who asked not to be named.
"In Carige's case, for example, fourth-quarter results will
be important to put a final number on their capital increase.
Banks that must write down loans further will have done so ahead
of the ECB's review."
Il Sole 24 Ore said that Carige's new top executive, who
took over in October in a management overhaul demanded by the
Bank of Italy, may bring forward approval of fourth-quarter
Banco Popolare said loan loss provisions in the
fourth-quarter had increased substantially because it had
reclassified some loans as non-performing, in accordance with
stricter European guidelines enforced by the Bank of Italy
during its continuing on-site audit.
Banco Popolare said early calculations suggest that
loan-loss charges of 1.7 billion euros have taken its full-year
loss to a bigger than expected 600 million euros. The bank is
due to report 2013 results at the end of February.
Small and mid-tier Italian banks have been the worst hit by
thousands of bankruptcies among Italian businesses.
In pointing this out, Bank of Italy Governor Ignazio Visco
has criticised the governance structure of cooperative banks
such as Banco Popolare and BPM, and of those controlled by a
foundation shareholder, saying it hampers fundraising efforts.
The charitable foundations that are key shareholders in
Monte Paschi and Carige are reluctant to lose their influence
over the banks in favour of new investors.
But for all the fundraising obstacles, cheap shares may
convince investors that some Italian banks are worth the risk.
"In principle, I'd be an investor (in certain Italian banks)
ahead of the ECB review," BCS Asset Management portfolio manager
Ed Shing said. "I don't think it will show up any major holes,
the economy there is recovering and some of the valuations are
The central bank has not provided an estimate of total
capital needs that may result from the ECB's review, but it has
repeatedly pointed to an International Monetary Fund calculation
pegging the overall shortfall for Italian banks at up to 14
($1 = 0.7307 euros)
(Additional reporting by Simon Jessop in London; Editing by