Righting past wrongs

27 March 2006

The scandalridden Italian bank s attempt to raise capital last summer for its bid for Antonveneta was a blueprint of what not to do. This time BPI needs to be whiter than white and show why a capital increase would be better than selling the bank.

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Banca Popolare Italiana said it would hold a board meeting on Monday to discuss a possible capital increase. This would reportedly be for E700mE800m. BPI is also reportedly planning to sell around E500m of assets.

BPI is expected to have a tier one ratio of 5% at the end of last year following a reported loss of around E700mE800m, according to a person familiar with the situation.

Italian papers have suggested BPI might use some of the capital raised to delist its subsidiaries, Reti Bancarie and Bipielle Investimenti. BPI said its board wasn't planning to discuss a delisting on Monday.

BPI was recently involved in a controversial attempt to take over rival Antonveneta. The scandal led to the arrest of Gianpiero Fiorani, its chief executive, and the resignation of Antonio Fazio as governor of the Bank of Italy.

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