A European Central Bank (ECB)
official told IFLR that a bank merger for beleaguered Italian
bank Banca Carige was a potential solution after it was asked
for a new capital plan by November.
Eighteen months after the failure of
counterparts Banca Popolare di Vicenza and Veneto Banca,
the ECB raised concerns about Banca Carige’s
ability to meet minimum capital thresholds. A merger could be a
solution, particularly as some countries across Europe are
heavily overbanked. "Bank turnarounds don’t
necessarily get solved by a merger, but this could be a
solution," the official said.
A new capital plan can be submitted later
than November providing that the bank has merger plans in
place. The ECB is also giving the lender until the end of the
year to raise its total capital ratio to 13.1%, up 90 basis
points from current levels.
Banca Carige provided the ECB with...