(Adds Veneto Banca statement, details)
By Silvia Aloisi
MILAN, March 17 Italian mid-tier regional
lenders Banca Popolare di Vicenza and Veneto Banca on Friday
requested state aid to fill a capital gap and avert the risk of
being wound down.
The banks said in separate, near-identical statements they
had told Italy's Economy Ministry, the Bank of Italy and the
European Central Bank they wanted to benefit from a so-called
precautionary recapitalisation by the state - a scheme already
being used by Monte dei Paschi di Siena.
Italy, scrambling to prevent a wider crisis in a banking
sector saddled with around 360 billion euros of problematic
loans, is discussing with European authorities a 5 billion-euro
($5.3 billion) rescue scheme for the two lenders.
That would be on top of the 6.6 billion euros the state is
expected to inject into Monte dei Paschi di Siena, which has a
capital gap of 8.8 billion euros.
To unlock state aid, the Veneto banks must be deemed viable
and have their restructuring plan - which envisages a merger
between the two lenders - approved by the European Commission.
Failing this, the banks would have to be wound down and
senior bondholders and large depositors would bear losses under
European "bail-in" rules aimed at shielding taxpayers, which
Italian authorities fear could harm the whole banking system.
A state rescue under the "precautionary recapitalisation"
scheme entails losses only for shareholders and junior
To shield themselves from potential further charges, the two
unlisted banks have launched a settlement offer aimed at
appeasing small shareholders who lost money as their financial
woes worsened. Both need a high take-up for the offer, which
expires next week, for the state rescue to go ahead.
Popolare di Vicenza said in its statement take-up for its
offer stood at 49.6 percent. Veneto Banca's take-up was 54
The banks' shareholders saw their savings wiped out when the
two lenders were rescued last year by state-sponsored,
privately-funded bailout fund Atlante.
The two banks are now offering to repay 169,000 shareholders
who bought stock in the last 10 years around 15 percent of
investment losses if they agree not to pursue legal action. EU
authorities are unlikely to authorise a state investment in the
banks if legal risks remain significant, sources have said.
Amid fears that at least one, if not both banks could
struggle to pull off a state bailout, bonds issued by the two
lenders slid this week.
Rating agency Fitch cut Popolare di Vicenza's long-term
rating on Friday to "CCC", citing the possibility that the
regional bank may have to impose losses on holders of its senior
(Editing by Andrew Roche)