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Carige said the ECB had asked it to present a new funding plan
by the end of March and a business plan two months later in
order to reduce risks and meet supervisory requirements.
Carige lost 3.4 billion euros in direct funding last year partly
from other banks but also from retail clients worried about the
introduction of stricter new European rules on rescuing ailing
lenders, which require hitting investors first.
Following the ECB's letter, disclosed late on Thursday, the bank
said it had moved to book a 57 million euro ($62 million)
writedown so its net loss for last year doubled to 102 million
euros.
Its shares lost 10 percent to 0.566 euros by 1107 GMT (06:07
a.m. EST), helping drag down the Italian bank sector as a whole
<.FTIT8300> by 2.3 percent.
Two Milan-based traders said the Carige statement had revived
concerns over the fragility of Italian banks, as the sector
struggles to digest high levels of bad loans without having to
turn to investors for cash.
Troubled loans at Italian banks are running at nearly a fifth of
total lending after a three-year recession. The economy returned
to growth last year but the recovery is already losing steam,
raising doubts about the banks' ability to improve poor levels
of profitability and asset quality.
UniCredit <CRDI.MI>, Italy's only globally systemic ally
important financial institution, has failed to put to rest
worries it may need a capital injection, pressuring Chief
Executive Federico Ghizzoni, who has repeatedly ruled out the
need for a capital increase.
"It's raised again the specter UniCredit may need to ask the
market for new capital," one trader said.
Shares in UniCredit were down 3 percent.
Sources said in February Ghizzoni had lost the support of
several influential shareholders frustrated with the bank's weak
share price performance.
Deputy Chairman Luca Cordero di Montezemolo was quoted on Friday
by Corriere della Sera newspaper, in response to a question
about the need for management change, as saying the bank needed
modernization and governance streamlining.
($1 = 0.9140 euros)
(Reporting by Stephen Jewkes and Valentina Za, Editing by David
Holmes)
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