* To raise 850 mln euros via share sale, bond conversion
* Posts 2013 loss hit by higher loan-loss charges
* One of 15 Italian banks under review by the ECB
(Updates with bank's statement)
By Valentina Za
MILAN, March 26 Veneto Banca plans to raise 500
million euros ($687 million) by selling new shares to investors
to strengthen its balance sheet after higher loan-loss
provisions contributed to a 96 million euro net loss last year,
the Italian mid-sized bank said.
Unlisted Veneto Banca is one of 15 Italian banks under
review by the European Central Bank as part of a check-up of
banking assets across the euro zone this year. Eight of them are
now planning to raise fresh capital for a total of around 8
Veneto Banca will also convert a 350 million euro bond into
equity by the end of June to bring its highest-quality capital
above a minimum threshold set by the ECB in the review.
The bank said late on Tuesday it had booked 459 million
euros in writedowns last year, mainly on impaired loans.
"The good performance at the operating level was completely
offset by the exceptional level of loan-loss provisions," Veneto
Banca said in a statement.
Italian banks are saddled with 160 billion euros in gross
bad loans as the economy shrank 9 percent during a two-year
The banks' efforts to clean up their balance sheets ahead of
a deadline to submit financial data to the ECB have taken a toll
on some lenders' 2013 earnings.
UniCredit, Italy's biggest lender by assets,
posted a record 14 billion euro loss last year due to massive
Veneto Banca had 1.5 billion euros in net bad loans at the
end of 2013, or 5.7 percent of total lending. The bank said low
market interest rates had driven its net interest income down
9.7 percent from a year earlier.
Italy's central bank has asked Veneto Banca to evaluate
possible merger options as part of a drive to strengthen the
country's fragmented banking system. But CEO Vincenzo Consoli
reiterated in a newspaper interview on Wednesday the bank wanted
to remain independent.
"Our industrial plan has a stand-alone perspective. We want
to remain independent," he said. "But we have the ECB's asset
quality review ahead of us, with its many uncertainties. We will
see what happens."
Consoli said the bank's highest-quality common equity
capital would rise from the present 7 percent to 10.3 percent by
July boosted by the share sale and the bond conversion. The ECB
has set an 8 percent threshold for lenders in the review.
Veneto Banca is also trying to sell a 71 percent stake in
private banking unit Banca Intermobiliare, a deal which
would add a further 0.7 percentage points to its common equity.
Consoli said four bidders, both Italian and foreign, were
currently looking at the company's financial data and would
decide whether to go ahead by early May.
Veneto Banca will set the price of a capital increase at a
board meeting on April 8.
($1 = 0.7258 Euros)
(Additional reporting by Lisa Jucca. Editing by Jane Merriman)