MILAN, March 29 Senior bonds issued by Banca
Popolare di Vicenza fell sharply on Wednesday, hit by concerns
that the Italian regional bank and local rival Veneto Banca may
not qualify for a state bailout they need to stay afloat.
Popolare di Vicenza reported on Tuesday a 1.9 billion euro
loss for 2016 hit by writedowns of doubtful loans and other
It also said a key indicator of its ability to meet
short-term cash outflows - the liquidity coverage ratio - fell
to 38 percent at the end of last year, well below an ECB
threshold of 90 percent, after it lost 3 billion euros in direct
funding. The ratio stood at 113 percent in June.
The bank warned it had suffered significant deposit outflows
this month as customers withdrew their money due to worries
about its future and possible losses under European "bail-in"
rules aimed at shielding taxpayers from bank rescues.
Both Popolare di Vicenza and Veneto Banca have requested
state aid but they must be deemed solvent by European regulators
to be allowed to receive public support.
By 0745 GMT an Oct. 2018 Popolare di Vicenza bond
yielded 24.19 percent, up from 20.71 percent at
Tuesday's close. The yield on a March 2020 bond
was up to 14.59 percent from 13.15 percent.
Traders said some selling also hit bonds issued by Veneto
Banca, which is yet to publish its full-year earnings.
(Reporting by Valentina Za, editing by Silvia aloisi)