Italian bank fund won't plug entire Carige capital hole: sources

ROME (Reuters) – Italian banks will not step in to plug a capital shortfall at regional lender Banca Carige after U.S. fund manager BlackRock pulled out of a planned rescue bid, sources said, making a state bailout for the bank more likely.

The two sources, who are close to a fund comprising Italian banks, spoke after officials met in Rome on Thursday to discuss what to do after BlackRock’s decision, which plunged the rescue plan into disarray. 

Carige, which was placed under special administration by the European Central Bank in January, has a capital shortfall of 630 million euros.

The FITD fund, which is financed by the country’s lenders and has the official purpose of guaranteeing bank deposits of up to 100,000 euros, had agreed to convert into Carige shares a 320-million-euro bond as part of the BlackRock rescue plan.

But that option is no longer on the table, the fund said in a statement after Thursday’s meeting, given that the wider plan to salvage Carige has faltered.

The head of the fund, Giuseppe Boccuzzi, told Reuters the fund aimed to support Carige and will assess any proposals that might come forward.

But the sources said the fund would only consider intervening in the rescue if other investors were involved, adding the fund’s job was not that of running banks.

That leaves Rome scrambling to find an alternative solution for Carige as it seeks to avoid its fourth major bank bailout in two years.

Over the past two years Italy’s biggest banks have shored up their capital and sold off billions of euros in troubled loans.

But the country has a long list of smaller banks struggling with bad debts and resistant to consolidation. In the case of Carige, the biggest investor – the Malacalza family of steel entrepreneurs – voted against a capital increase last year.  

Italian newspapers said at the weekend that Apollo Global Management and Warburg Pincus could be interested in Carige but both options were dismissed by two separate sources close to the matter.

The ECB had given the special commissioners now running Carige until May 17 to find binding bidders for the bank, sources said. An ECB spokeswoman declined to comment when asked if that deadline had been extended after BlackRock’s withdrawal.

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