Unipol bank unit revamped after cenbank inspection-CEO

MILAN, May 20 (Reuters) - Italian insurance company Unipol's (UNPI.MI: Quote, Profile, Research) banking unit was revamped months ago, Unipol Chief Executive Carlo Salvatori said on Wednesday, responding to a media report on a Bank of Italy inspection.

Italy's Panorama weekly last week detailed a Bank of Italy report it said was filed at the end of 2008 which told Unipol Banca to strengthen internal controls, reduce risky operations and produce a new business plan by April 30.

The media report refers to "things that we have done six months ago. The bank is different now. The bank is structured with people of quality," Salvatori told a news conference.

The bank has not previously commented on a Bank of Italy inspection, though last November, Unipol appointed Luciano Colombini as the group's vice-director in charge of banking and in February rebranded the unit as UGF Banca.

One Milan analyst said on Wednesday he had doubts about the bank's situation even though the unit booked an 8 million-euro pretax profit in the first quarter after a pretax loss of 112 million euros in full year 2008.

A second Milan analyst said he believed a problem with derivatives at the banking unit had been resolved and provided for in the fourth quarter of 2008.

When asked about the report saying the Bank of Italy had stopped Unipol Banca from operating in derivatives, Salvatori said the unit was "only using (derivatives) to cover risk" and not for any other activity.

On whether the central bank had stopped the expansion of Unipol Banca branches, as reported by Panorama, Salvatori repeated his earlier comments, saying efforts were being made to increase the sale of bank products to customers served by its insurance network.

The bank had 299 branches at the end of the first quarter branches, unchanged from the end of 2008 and compared with 283 the previous year, Unipol said in its first quarter results released last week.