* Sale of four small lenders stalls
* Economy minister meets Italian bankers on Monday
* Difficulties overshadow Monte dei Paschi rescue
(Recasts with sources on UBI, Padoan comment, details)
By Stefano Bernabei and Paola Arosio
ROME, Oct 3 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, UniCredit
and UBI and Bank of Italy Governor Ignazio
Visco. Padoan said the meeting had been called to deal "with a
situation of transition not of crisis."
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,
UniCredit and UBI lent 1.65 billion euros to
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
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.
($1 = 0.8914 euros)
(Additional reporting by Andrea Mandala, Gianluca Semeraro;
writing by Valentina Za. Editing by Jane Merriman)