August 1, 2014 / 9:17 PM / in 3 years

UPDATE 1-Italy's Banca Carige posts H1 net loss on writedowns, restructuring

(Adds details of financial results)

MILAN, Aug 1 (Reuters) - Italy’s Banca Carige posted a first-half net loss of 45.5 million euros ($61 million) on Friday due to writedowns on its insurance units, higher taxes and costs to close down branches as part of its restructuring plan.

Carige’s loss was much smaller than the 595 million euros it reported in the first half of last year due to a large goodwill writedown on two banking units.

The Genoa-based lender, which is in exclusive talks to sell its Carige Vita Nuova and Carige Assicurazioni insurance units to an affiliate of U.S. private equity firm Apollo Global Management, booked a 23 million euro charge on goodwill writedowns on the two units.

It also wrote down the value of properties owned by the two insurers, after magistrates in May arrested the bank’s long-standing former chairman along with six others on suspicion they had forced the two units to buy assets inflated prices for their own profit.

Carige is restructuring under new chief executive officer and turnaround expert Piero Montani after a balance-sheet clean-up led to a 2013 loss of 1.7 billion euros. The bank said a recently completed 800 million euro share sale had boosted its best-quality Common Equity Tier 1 capital to 9.9 percent of assets.

That is above an 8 percent threshold set by the European Central Bank (ECB) in a check-up of lenders across the euro zone this year. Carige is one of 15 Italian banks targeted by the review.

The bank said it had repaid slightly more than half of 7 billion euros in emergency funds borrowed by the ECB at the height of the euro zone crisis.

The bank plans to borrow around 750 million euros from the ECB when it next offers a new round of cheap loans later this year as part of a scheme aimed at spurring bank lending.

To keep credit risk in check as Italy’s economy struggles to leave behind the worst recession in 70 years, Carige cut loans to clients by 7 percent in the period.

Loan writedowns totalled 167 million euros in January-June, down 30 percent from a year earlier. ($1 = 0.7449 Euros) (Reporting by Valentina Za; Editing by Robin Pomeroy and Lisa Shumaker)

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