Italy struggles to push ahead with sale of four small banks
- Wall Street rises, buoyed by economic data; Dow sets high
- Twitter (TWTR) 'Takeover Money' Moves On as 'Trump Money' Moves In
- Amazon (AMZN) Could Open Over 2,000 Brick-and Mortar Groceries if Tests Succeed - DJ; Kroger (KR) on Watch
- Buy Any Seasonal Market Weakness Ahead of Year End Rally - Oppenheimer (SPY)
- After-Hours Stock Movers 12/05: (TXMD) (COUP) (BOBE) Higher; (SB) (LXRX) (STWD) Lower (more...)
Bank of Italy Governor Ignazio Visco attends the session 'Recharging Europe' in the Swiss mountain resort of Davos January 23, 2015. REUTERS/Ruben Sprich
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
By Stefano Bernabei and Paola Arosio
ROME (Reuters) - Italy's economy minister met with senior Italian bankers and the Bank of Italy governor on Monday to try to push forward with a sale of four small banks that were rescued from bankruptcy last November.
The meeting comes just days after a deadline to sell the banks was extended for a second time. If the four banks cannot be sold within two years of last November's rescue, Italy risks having to wind them down under tough European rules that came into force this year.
The sale of Banca Marche, Popolare Etruria, CariFerrara and CariChieti, has become the latest banking headache for Italy's government, which is already struggling to sort out the country's third biggest bank, Monte dei Paschi di Siena
"There is only one item on the agenda; how to find a solution for the (four) banks," a source, who declined to be named as the talks are private, said.
Economy minister Pier Carlo Padoan called the meeting on Monday with the bosses of Intesa Sanpaolo (NYSE: ISP), UniCredit
The source also said the European Central Bank was "putting up ever more hurdles" in the sale process. "We have to find a solution now because we can't carry on with this uncertainty."
The four banks were rescued last year at a cost of 3.75 billion euros ($4.21 billion), which was carried out by a fund financed by the country's other banks. Intesa Sanpaolo (NYSE: ISP), UniCredit
The banks that contributed the money were hoping to recoup at least some of through a sale of the four banks. This was initially due to take place by the end of April but was postponed to the end of September to give more time to attract buyers.
The Bank of Italy rejected bids from private equity funds over the summer because they were too low, the sources said.
An alternative solution in which UBI would buy three of the four banks also ran into trouble because of conditions set by the ECB to clear the deal.
Sources close to the matter said on Monday the ECB was demanding a 600-million euro capital increase by UBI, double the amount the bank is willing to raise. UBI was willing to pay only a "symbolic price" for the ailing banks, one source said.
Italy's leading financial institutions have already contributed 4.25 billion euros to a bank rescue fund - Atlante -this year. Atlante bailed out regional banks Popolare di Vicenza and Veneto Banca and is also meant to take part in Monte dei Paschi's bailout plan by buying a chunk of its bad loans.
Italy, unlike Spain and Ireland, did not step in to help its banks during the 2008 financial crisis. Since then recession has saddled Italian banks with 360 billion euros in soured debts but the government now has fewer options in terms of fixing the banks due to new strict EU rules curbing state aid to lenders.
(Additional reporting by Andrea Mandala, Gianluca Semeraro; writing by Valentina Za. Editing by Jane Merriman)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Toyota to expand hybrid system development to further cut emissions
- Dalian Wanda executive in charge of relisting plan resigns
- Euro steadies after short-covering rally, eyes on ECB and Italy
Create E-mail Alert Related CategoriesReuters
Related EntitiesMerriman Curhan Ford, European Central Bank, Bankruptcy
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!