* Rights issue among options to boost capital - sources
* Board yet to approve bond conversion
* Bidders doing due diligence on private banking unit -
MILAN, March 4 Italian mid-sized lender Veneto
Banca will discuss a possible rights issue among options to
boost its capital base above regulatory thresholds at a board
meeting later on Tuesday, sources close to the matter told
The unlisted lender is one of 15 Italian banks under
scrutiny in a review the European Central Bank (ECB) is carrying
out across the euro zone before taking on supervision of the
sector from national regulators in November.
Veneto Banca's common equity, a measure of loss-absorbing
bank capital, stood at 7.2 percent of risk-weighted assets at
the end of December, below an 8 percent minimum requirement set
by the ECB for banks in the review.
The bank targets a common equity ratio of 9.5 percent by
It had said it would convert a 350 million euro ($482
million) bond into equity to add around 1.35 percentage points
to its core capital. The board was due to approve the conversion
in February but it has not done so yet.
"The bank is looking at different options," one of the
sources said, listing a rights issue among the possibilities.
A second source said a share sale was likely to be approved
while the bank continued to weigh other options including the
bond conversion and an asset sale.
Veneto Banca is trying to sell a 71 percent stake in listed
unit Banca Intermobiliare, a deal which would provide a
further capital boost of around one percentage point.
The second source said a Jan. 24 deadline had passed to
submit non-binding offers and potential bidders were now
conducting their due diligence on the private banking unit.
Six Italian lenders among those under scrutiny by the ECB
are planning to tap investors for a total of more than 7 billion
($1 = 0.7260 euros)
(Reporting by Valentina Za; Additional reporting by Andrea
Mandala; Editing by Mark Potter)