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Italy’s Banks to Submit $20 Billion Capital Plans This Week

Italy’s Banks to Submit $20 Billion Capital Plans
UniCredit SpA, Italy’s biggest-bank, needs 8 billion euros of extra capital and is raising money with a rights offering, while Intesa Sanpaolo SpA, the country’s No. 2 lender, doesn’t need more, the EBA said. Photographer: Alessia Pierdomenico/Bloomberg

Italian banks will submit plans to fill a 15.4 billion-euro ($20 billion) capital shortfall by January 20, said Giuseppe Mussari, chairman of Italy’s Banking Association.

Italian banks were last month told by the EBA to boost capital after conducting stress tests on the lenders. UniCredit SpA, Italy’s biggest-bank, needs 8 billion euros of extra capital and is raising money with a rights offering, while Intesa Sanpaolo SpA, the country’s No. 2 lender, doesn’t need more, the EBA said. Banca Monte dei Paschi di Siena SpA’s shortfall is 3.3 billion euros, Unione di Banche Italiane ScpA needs 1.4 billion euros and Banco Popolare SC 2.7 billion euros.

“The three banks that still have to comply with EBA’s targets will meet the deadline and will present their plans this week,” Mussari told reporters in Milan. The banks’ proposals won’t include share sales he said.

Mussari reiterated that the lobby group doesn’t agree with the EBA’s demands for banks to increase capital and said it’s still considering legal action against the regulator. The EBA should change rules in a review in March, the banking lobby group said.

“The test penalizes Italian banks, and doesn’t take into account that lenders in the country are retail and commercial banks, with a lower risk profile,” Mussari said.

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