ECB asks Banca Carige for plan to cut soured loans

October 27, 2016 1:20 PM EDT
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MILAN (Reuters) - Italy's Banca Carige (NASDAQ: CRGI) said on Thursday it had received a letter from the European Central Bank asking it to present a plan to cut its soured loans and assess the impact on its capital base.

The lender said in a statement it had until Nov. 3 to send the ECB its own observations on the matter.

Carige emerged as one of the weakest lenders in the euro zone after a 2014 sector health check and had to raise capital last year.

Carige said the ECB, in a "draft" decision, had asked it to cut soured loans to a maximum of 5.5 billion euros ($6 billion)by the end of 2017 with a minimum coverage ratio of 45 percent.

It had also been asked to cut its problematic loan portfolio to a maximum of 4.6 billion euros by the end of 2018 and a maximum of 3.7 billion euros by the end of 2019 with minimum coverage ratios of 43 percent and 42 percent respectively.

(Reporting by Stephen Jewkes)

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