June 25, 2014 / 1:36 PM / 4 years ago

Bank of Italy approved removal of adds-ons for Popolare Milano

MILAN, June 25 (Reuters) - Italy’s Banca Popolare di Milano said on Wednesday that the Bank of Italy had given its green light to a full removal of the so-called ‘add-ons’, larger risk-weights to calculate the lender’s capital ratios.

The central bank’s decision, which is effective from June 30, will lift Popolare Milano’s Core Tier 1 capital adequacy ratio to around 11 percent from 7.30 percent, including the impact of a recent cash call and the sale of the bank’s stake in asset manager Anima Holding.

The lender was forced by the Bank of Italy to apply the adds-on following an audit in 2011 which revealed excessive exposure to real estate risks, among other issues.

Shares in Popolare Milano accelerated gains after the announcement. They were up almost 3 percent at 0.6650 euros by 1330 GMT.

Reporting by Francesca Landini

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