- Bank executives said to review options for finding backers
- Popolare di Vicenza faces ECB deadline for capital increase
Italy’s Finance Minister Pier Carlo Padoan met with executives at UniCredit SpA, Intesa Sanpaolo SpA as well as state-lender Cassa Depositi e Prestiti to discuss recapitalization plans for the country’s struggling cooperative banks, people with knowledge of the matter said.
At the meeting, UniCredit Chief Executive Officer Federico Ghizzoni and Intesa CEO Carlo Messina, who are the leading arrangers of share sales for Banca Popolare di Vicenza SCpA and Veneto Banca SCpA, reviewed options for finding backers before the listing of the two cooperative banks, the people said, asking to not be identified because the meeting was private.
Popolare di Vicenza is seeking to raise as much as 1.8 billion euros ($2 billion) to shore up its balance sheet as the cooperative lender transforms into a joint-stock firm, while Veneto Banca plans to raise up to 1 billion euros through an initial public offering. The deals are considered key to avoid a resolution that would punish creditors and rattle Italy’s financial system, already hurt by rising non-performing loans and a bank selloff.
Bank of Italy Governor Ignazio Visco and Giuseppe Guzzetti, head of the banking foundations association, also attended the meeting, the people said, without elaborating on the outcome of discussions.
Officials for UniCredit, Popolare di Vicenza, Intesa and CDP declined to comment. Spokesmen for the Finance Ministry and Veneto Banca were not immediately available to comment.
UniCredit, the sole guarantor of Popolare di Vicenza’s IPO, said last week it’s is assessing whether to postpone the deal. Failing to find buyers for the stock would otherwise force Italy’s biggest bank to purchase the shares.
The European Central Bank is increasing pressure on Italian lenders to clean up their balance sheets, consolidate through mergers and tackle an estimated 360 billion euros of troubled and defaulted loans that are undermining lending. Non-performing loans remain a top priority for the central bank, Daniele Nouy and Sabine Lautenschlaeger, who lead the ECB’s supervisory board, told reporters last month.
In Italy, supervisors requested a strict timetable for reducing deteriorated credit as part of its conditions for approving the merger of Banco Popolare SC with Banca Popolare di Milano Scarl. The ECB has also warned that without a capital increase, due by April 30, Popolare di Vicenza would have to draw on creditor funds to bolster buffers.
Veneto Banca, Banca Monte dei Paschi di Siena SpA, and Banca Carige SpA also face deadlines to sell stock or reorganize while four lenders rescued last year are up for sale.