MILAN, Feb 2 (Reuters) - Veneto Banca will not be rushed into a hasty merger with one of its rivals, the lender’s CEO told an Italian newspaper, despite being asked by the Bank of Italy to do a deal to improve its capital base and strengthen the country’s banking system.
The unlisted bank is one of 15 Italian lenders being scrutinised by the European Central Bank (ECB), which will take over supervision of Europe’s top banks from national regulators next year, and was asked by the Bank of Italy to consider merger options after its own on-site audit.
“I ask myself if it would be better to wait for the (ECB‘s) asset quality review before conducting such a big operation,” Veneto Banca’s Vincenzo Consoli told newspaper Il Sole 24 Ore.
Consoli said that the review would clarify the health of all the interested parties, adding that “one cannot disregard that and carry out extraordinary procedures in that phase”.
The ECB asset quality review is due to be completed in June, by which time Veneto Banca’s core Tier 1 capital ratio - a measure of financial strength - should reach 9.57 percent, which should be enough to pass the ECB’s test, Consoli said.
“We think we are strong enough to remain independent, but we will wait for directions from (the Bank of Italy). They direct the traffic,” Consoli added.
The Italian banking sector has struggled under the weight of increasing bad loans during a two-year recession and four of its lenders plan capital hikes this year.
Banco Popolare, Monte dei Paschi di Siena , Banca Popolare di Milano and Banca Carige all plan to tap markets before the summer. (Reporting by Isla Binnie; Editing by David Goodman)