March 1, 2014 / 3:06 PM / in 4 years

Banco Popolare approves cap hike to be launched on March 31

LODI, Italy - March 1 (Reuters) - The shareholders of Italy’s Banco Popolare on Saturday gave final approval to a 1.5 billion euro ($2.1 billion) capital increase to be launched on March 31.

The rights issue will end on April 17, the cooperative lender’s Chief Executive Pier Francesco Saviotti said on the sidelines of the shareholders’ meeting.

The fundraising will give the bank a core capital ratio, indicating its high quality or low-risk capital, of 10.8 percent, higher than the 10 percent level it indicated a month ago, and well above the minimum threshold of 8 percent set by the European Central Bank.

Banco Popolare is one of 15 Italian lenders under review by the ECB in a Europe-wide review of the sector.

The move to boost the capital base could also give Italy’s number four lender fresh funds to acquire a rival.

If an opportunity arises, “we will not backtrack,” said Saviotti, speaking about a possible acquisition among Italian mid-sized lenders.

However the CEO denied contacts with smaller rival Veneto Banca, which is in search of a strong partner.

The shareholders meeting also approved a reverse stock split of the bank’s shares at a ratio of one new common share every 10 outstanding shares.

Banco Popolare reported on Friday a full-year net loss of 606 million euros for 2013 after heavy writedowns on bad debts.

Saviotti said he was confident the bank could return to pay a dividend in 2015.

A shareholders meeting scheduled for March 29 is expected to appoint Saviotti and the bank’s Chairman Carlo Fratta Pasini for a new term, Fratta Pasini said. ($1 = 0.7240 euros) (Reporting by Andrea Mandala; writing by Francesca Landini; Editing by Toby Chopra)

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