| MILAN, March 8
MILAN, March 8 A top executive from Veneto Banca
and Popolare di Vicenza on Wednesday met Italian treasury
ministry officials to assess the chances of agreeing a state
bailout of the two troubled banks, a source with direct
knowledge of the matter said.
The source said low take-up of a settlement offer to small
shareholders in the banks could put at risk the 5 billion euro
($5.3 billion) bailout that Italy is discussing with the
European Commission and the European Central Bank.
For the rescue to go ahead, EU competition authorities must
deem the banks viable and approve a restructuring plan for them.
Failing this, the banks would have to be wound down in a blow to
Italian savers and the wider banking system.
The two banks, which are expected to make big losses for
2016, already received 3.5 billion euros last year from
state-sponsored, privately-funded rescue fund Atlante, created
to help Italy's troubled banks under new EU rules that limit
state aid to shield taxpayers.
But this process all but wiped out the savings of more than
200,000 small shareholders in the lenders.
The two banks, based in the northeastern Veneto region, have
proposed repaying 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.
The source said that the outcome of this settlement offer
was an important factor in determining whether the two banks
qualified for state aid.
The two banks said on Tuesday take-up of the settlement so
far was around 30 percent ahead of a deadline of March 15 for
Veneto Banca and March 22 for Popolare di Vicenza.
The source said take-up had increased significantly since
However, Wednesday's meeting between treasury officials and
Popolare di Vicenza Chief Executive Fabrizio Viola -- who has
been drafted in to oversee a merger between the two banks and
also chairs a strategic committee at Veneto Banca -- was not
expected to yield a final decision.
The treasury was not immediately available for a comment.
The banks have said they are aiming for an 80 percent
take-up and have set aside 600 million euros to repay
The two banks are being probed by prosecutors over the
alleged mis-selling of shares to retail investors and new
management has said the settlement aims to make them more
attractive to future buyers by lowering legal risks.
($1 = 0.9490 euros)
(Additional reporting by Giuseppe Fonte, writing by Valentina
Za, editing by Paola Arosio and Jane Merriman)