UniCredit Drops as ECB Expresses Concerns on Credit Quality
- Italian bank preparing to raise as much as 13 billion euros
- Bank expects to miss ECB capital requirements for full year
This article is for subscribers only.
UniCredit SpA tumbled in Milan trading ahead of a 13 billion-euro ($13.9 billion) capital increase, as Italy’s largest lender cautioned that its new business strategy may not convince the European Central Bank.
The ECB has demanded an improved plan for dealing with bad loans by the end of February, the bank said in a filing Monday detailing the share sale and related caveats. Under a strategy announced in December, the lender intends to use about 8 billion euros to absorb losses on loans that it expects to sell to investors at a discount.