Some of Italy’s biggest banks are moving to increase their capital to comply with tougher rules on how much lenders must hold in reserve.
UBI Banca was the first announcing it will sell one billion euros worth of new shares while Banca Monte dei Paschi di Siena said it was committed to boosting its capital but would not say by how much.
They are the third and fourth largest Italian banks in market value terms. Unicredit and Intesa Sanpaolo – the two biggest – are also expected to have to raise capital, particularly if European regulators designate them as “systemically important financial institutions.”
Monte dei Paschi, which is the world’s oldest bank, also has to pay back almost two billion euros in Italian government aid.
The lender – which barely cleared a check on the health of European banks last year – was the single biggest recipient of government help during the financial crisis.