* Pop Vicenza seen spearheading M&A wave among Italian
* Core capital to reach 12.5 pct after cash call, bank says
* Veneto Banca, Pop Etruria among possible targets
* Pop Vicenza chairman says no imminent deal
(Recasts with confirmation, details, background)
By Valentina Za and Andrea Mandala
MILAN/VICENZA, Feb 18 Banca Popolare di Vicenza
is to tap shareholders for 1 billion euros ($1.4 billion) and
looks set to use the cash to buy another bank, a move that may
trigger a much-anticipated wave of mergers among smaller Italian
Smaller banks have borne the brunt of Italy's recession and
are being encouraged by the Bank of Italy to merge to shore up
their finances - a process which a sector-wide health check by
the European Central Bank (ECB) is expected to hasten.
Pop Vicenza is the fifth bank to detail plans to raise
capital by around mid-year out of 15 Italian lenders under
scrutiny by European regulators, and said this will give it the
wherewithal to make acquisitions and strengthen core capital.
Monte dei Paschi di Siena, Banco Popolare
, Banca Popolare di Milano, Banca Carige
plan to tap the market for a total of 6 billion euros,
starting in April.
Popolare di Vicenza Chairman Gianni Zonin has long said he
expects the number of Italian banks to halve in three-to-five
years' time from nearly 700 now as Italy struggles to emerge
from the longest recession since the end of World War Two.
His bank, based in the wealthy northeastern region of
Veneto, has expressed interest in Popolare Etruria and
Veneto Banca, two smaller cooperative lenders who have been told
by the central bank to find a buyer.
"Veneto Banca and Pop Etruria are two operations we are
considering, as are others," Zonin told a news conference on
Tuesday, noting that no deal was imminent.
"We may talk about it after the shareholder meetings," he
said. Italian companies normally hold their annual shareholder
meetings by the end of April.
A source with knowledge of the matter said: "(Popolare
Vicenza) is looking at a number of options, no decision has been
taken yet. It is raising capital to be ready to move."
Shares in Pop Etruria rose after Pop Vicenza confirmed the
capital increase, ending up 2.9 percent at 0.74 euros.
Pop Vicenza's Managing Director Samuele Sorato said the
bank's common equity tier 1 ratio - a key measure of financial
strength - would reach 12.5 percent after the capital increase,
well above the minimum 8 percent threshold set by the ECB.
Bankers say Italy's so-called "popolari" banks are set to
play a key role in the expected consolidation.
However, outside investors may be put off by their "one
shareholder, one vote" structure which gives every shareholders
the same influence over how the bank is run irrespective of the
size of their holdings.
Popolare di Milano biggest investor, private equity fund
Investindustrial, sold its 8.6 percent stake last month after
its plan to turn the bank into a joint-stock company - as
requested by the Bank of Italy - was defeated by unions and
"Given their governance structure, Italian popolari banks
will only merge with other popolari," one senior banker said.
($1 = 0.7298 euros)
(Writing by Silvia Aloisi; Editing by Lisa Jucca and Louise