UniCredit exec says Sicily mafia on way out

MILAN, June 17 (Reuters) - Banco di Sicilia can play an important role against the mafia in Sicily by funding sound and competitive companies, the chairman of the Sicilian unit of Italian bank UniCredit (CRDI.MI) said on Tuesday.

Speaking to foreign journalists in Milan, Ivan Lo Bello said the mafia had a "parasitic" business culture which thrived on public money funnelled into traditional sectors such as construction and infrastructure.

"Wherever there is an efficient economic system, the mafia is forced to take a step back," said Lo Bello, who also heads the Sicilian branch of employers body Confindustria.

"I believe Banco di Sicilia, like any bank, can do a lot ... by funding companies which do their job well," Lo Bello said.

"The free market is not compatible with the Sicilian mafia."

He was named chairman of Banco di Sicilia after distinguishing himself in a campaign against "pizzo" or protection money. Sicilian business leaders headed by Lo Bello decided last September to expel members of their association who refused to denounce mafia pressures.

"I believe an irreversible decline has started for the mafia in Sicily. The question is how long it will take," Lo Bello said.

Banco di Sicilia was part of Rome-based bank Capitalia, which UniCredit bought in 2007. The unit had challenged its new Milan-based owner earlier this year by refusing to endorse UniCredit-appointed executives. Lo Bello was appointed in April after the fight.

"The banking system can do a lot if it does its job well and turns its back on the idea of a bank with strong political and local connections," Lo Bello said.

BUILDING BRIDGE

Asked about the possibility that a bridge the Italian government plans to build to link Sicily to the mainland would bring fresh money to the mafia's coffers, Lo Bello said that did not have to be necessarily the case.

"At present in Sicily it is possible to build with public money without the mafia getting involved," Lo Bello said.

He added the situation was more difficult in Calabria, the southern Italian region which the bridge would connect to Sicily, as companies there operated mainly in traditional sectors infiltrated by the local mafia, or 'Ndrangheta.

Italy's biggest construction company, Impregilo (IPGI.MI), won a contract to build the Sicilian bridge under the last government of Silvio Berlusconi.

The project had been shelved by the centre-left government of Romano Prodi and then quickly revived after Berlusconi came back to power in April this year.

"The bridge can be useful infrastructure if it does not connect two infrastructural deserts," Lo Bello said. (Reporting by Valentina Za; Editing by Paul Bolding)