MILAN, May 26 (Reuters) - Athena Capital said on Monday its stake in Banca Popolare di Milano (BPM) had fallen following a 497 million euro ($678 million) share sale by the Italian bank, and it would not invest any more money in BPM unless it implemented reforms.
The fund, through which Italian investor Raffaele Mincione previously held 7 percent of the bank, bought some shares in the fundraising, but not enough to maintain its stake at that level.
Its holding has fallen to about 5.7 percent, according to Reuters calculations.
Athena said it would not invest further in BPM, one of 15 lenders targeted by a European Central Bank health check, as reforms prescribed by the Bank of Italy to give institutional investors more influence have stalled.
“The lack of resolution achieved by current management of acknowledged governance problems ... could soon become an insurmountable obstacle to the bank’s future growth,” Athena said in a statement.
A 2011 audit of BPM revealed excessive exposure to real estate among other issues and prompted the Bank of Italy to force it to apply larger risk-weightings than its peers to calculate capital ratios that measure financial strength.
BPM repaid 500 million euros in state aid a year ago.
$1 = 0.7336 Euros Reporting by Andrea Mandala, Writing by Isla Binnie; Editing by Mark Potter