Sept. 30 (Bloomberg) -- UniCredit SpA, Italy's biggest bank and the owner of Germany's HVB Group, tumbled more than 10 percent for the second day in Milan trading amid concern the company may need to raise money to strengthen its finances.

UniCredit fell a record 38 cents, or 13 percent, to 2.60 euros, giving the bank a market value of about 34 billion euros ($48 billion). The stock, at its lowest since Dec. 4, 1997, has fallen 55 percent this year, compared with the 41 percent slide in the 69-member Bloomberg Europe Banks and Financial Services Index.

``Fears in the equity market of a rights issue and surrounding the group's liquidity position'' may be weighing on the stock, Keefe, Bruyette & Woods Ltd. analysts including Marcello Zanardo wrote in a research report today. Concern that UniCredit may help in the bailout of Germany's Hypo Real Estate Holding AG, which could have ``negative consequences for its capital position,'' may also be hurting the shares, they said.

Hypo Real Estate, one of at least five European banks bailed out by governments amid the credit crunch this week, received a 35 billion-euro loan guarantee from Germany and an unidentified group of banks. UniCredit won't need additional funding this year, Chief Executive Officer Alessandro Profumo said yesterday, and a company official reiterated the comments after the shares were temporarily suspended for the second time today.

``We're absolutely confident about our position, even in this hectic market scenario,'' Profumo wrote in a letter to employees. The bank's medium and long-term funding for this year is complete, while its short-term funding is 10 times what regulators demand, and sufficient for beyond this year, he added.

Market Turmoil

``We see this as a positive, but do not expect it will have an impact on UniCredit's stock price,'' Cassa Lombarda analysts wrote in a research note today. ``In the very short term, we expect UniCredit shares will continue to be negatively affected by the global financial turmoil.''

The fallout from the U.S. financial crisis on Italy's banks and insurers is ``contained'' and their liquidity levels are ``adequate,'' the country's top financial-market regulators said earlier today in a statement.

Keefe, Bruyette & Woods doesn't expect a rights offering from UniCredit and said the Italian company ``isn't stretched on liquidity.'' It estimates UniCredit will write down about 1 billion euros on its structured credit portfolio in the second half and cut its dividend by about 50 percent.

To contact the reporter on this story: James Amott in Milan at jamott@bloomberg.netElisa Martinuzzi in Milan at emartinuzzi@bloomberg.net

Last Updated: September 30, 2008 11:50 EDT