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UPDATE 1-Italy's Banca Carige says watchdog challenges accounts
January 22, 2014 / 6:36 PM / 4 years ago

UPDATE 1-Italy's Banca Carige says watchdog challenges accounts

* Carige may challenge Consob objections

* H1 2013 loss of 603mln euros if Consob objections met

* Any restatement would not affect asset base (Adds details, background)

MILAN, Jan 22 (Reuters) - Italy’s Banca Carige said on Wednesday market watchdog Consob was contesting the bank’s financial statements for the full year of 2012 and the first half of 2013 because of accounting irregularities.

The mid-sized, Genoa-based bank said it disagreed with Consob’s assessment and may challenge it in court.

The accounting irregularities identified by Consob are the latest blow for Italy’s No. 10 bank, which is struggling to sell assets to help plug a 800-million euro capital shortfall by March and avoid a big share issue.

The bank, whose main shareholder is a cash-strapped banking foundation, is one of a group of Italian mid-sized lenders to have come under scrutiny after their share of bad loans rose during Italy’s longest post-war recession. Other Italian banks also have such not-for-profit foundations as shareholders.

In a statement, Carige gave a pro-forma restatement of its accounts if Consob’s objections were met. It said that in a worst-case scenario, its net loss in the first half of 2013 would widen to 603 million euros ($817.94 million) from the 31.1 million euro loss it reported.

For 2012, the full-year loss would be 132.8 million euros compared to a reported loss of 62.5 million euros.

Carige is also one of 15 Italian banks subject to a sector-wide health check-up by the European Central Bank as it prepares to take over supervision of euro zone lenders.

Carige said it had already carried out a string of impairments on goodwill in its 9-month accounts to the end of September 2013, reflecting the impact of writedowns requested by Consob.

Those writedowns totalled 1.65 billion euros over the period, leaving the bank with a net loss of 139.1 million euros.

It said any actual restatement of the accounts challenged by Consob would not affect its asset base. ($1 = 0.7372 euros) (Reporting by Silvia Aloisi; additional rpeorting by Isla Binnie. Editing by Jane Merriman)

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