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Financials

UPDATE 1-Italy's Popolare di Bari taps banking fund for help - sources

(Adds details, background)

MILAN, Dec 5 (Reuters) - Unlisted Italian cooperative lender Popolare di Bari has tapped a banking fund financed by rival lenders to fill a capital shortfall, two sources close to the fund said on Thursday.

Popolare di Bari, the biggest bank in Italy’s underdeveloped south, has long been seen as a potential rescue candidate after piling up losses due to impaired loans.

The sources said Italy’s FITD depositor protection fund had received a preliminary request for help from Popolare di Bari, but added the fund needed to examine the business plan the bank is preparing before taking a decision.

“An intervention of the fund is possible as a part of a wider rescue plan which is still not on the table”, one of the sources said.

The sources said that the bank’s capital shortfall would not be clear until Popolare di Baris’ business plan was completed.

A separate source on Tuesday had said that the ailing regional lender needs up to 1 billion euros ($1.10 billion) in capital.

Popolare di Bari declined to comment.

The Bank of Italy said last week that stress tests it conducted this year among small Italian banks, not directly supervised by the European Central Bank, showed that six lenders would have insufficient capital under an adverse scenario.

Mediocredito Centrale could take part in Popolare di Bari’s rescue, the sources said, but added that the state-owned lender needs a capital injection.

A government source told Reuters on Tuesday that the ruling coalition is considering passing a rule to make it easier for Mediocredito Centrale to take part in the rescue plan.

In July the FITD backed the latest rescue plan for troubled Banca Carige, agreeing to shoulder the bulk of a proposed 900 million euro cash injection. ($1 = 0.9073 euros) (Reporting by Andrea Mandala, editing by Giulia Segreti and Emelia Sithole-Matarise)

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