January 21, 2019 / 6:16 PM / 6 months ago

UPDATE 1-Italy's UBI hasn't been tapped to prop up Carige, Monte dei Paschi

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MILAN, Jan 21 (Reuters) - UBI Banca, Italy’s fifth-largest lender, has not been contacted by the government to help prop up Monte dei Paschi and Banca Carige , the bank’s supervisory board chairman said on Monday.

The Italian government is considering merging troubled banks Monte dei Paschi and Carige with healthier rivals such as UBI Banca as it scrambles to avert a new banking crisis, sources familiar with the matter told Reuters last week.

Asked whether UBI might intervene in Italy’s banking sector and, more specifically, to help out Monte dei Paschi and Carige, Andrea Moltrasio said no.

He also said there had been no contacts between UBI and the Italian Treasury over the matter.

“We share general concern for the situation (of the banking system), we’re happy to be considered a healthy bank,” Moltrasio said.

Sources said mid-sized lender BPER Banca is seen as another possible white knight for Monte dei Paschi.

However, healthier banks are generally seen as being reluctant to step in to support their weaker peers to protect their balance sheets.

Any such merger would also need a green light from the European Central Bank, which would likely require a capital increase to ensure financial stability. (Reporting by Andrea Mandalà, writing by Giulio Piovaccari, editing by Susan Fenton)

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