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Italy struggles to come up with Carige rescue plan - sources

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By Reuters
Italy struggles to come up with Carige rescue plan - sources
FILE PHOTO: The Carige bank logo is seen in Rome, Italy, April 16, 2016. REUTERS/Stefano Rellandini/File Photo   -   Copyright  Stefano Rellandini(Reuters)

By Giuseppe Fonte and Stefano Bernabei

ROME/MILAN (Reuters) – Italy is struggling to pull together a rescue plan for Carige <CRGI.MI> which the troubled Genoa-based bank needs to avoid a liquidation, two sources familiar with the matter said.

Weakened by decades of mismanagement, Carige is the latest Italian bank that is at risk of collapse as a result of bad loans left over from the country’s deep recession.

The European Central Bank placed Carige under special administration at the start of the year after a failed capital raising, but efforts to find a buyer as demanded by regulators have so far proved fruitless.

The latest attempt to salvage Carige revolves around a depositor protection fund (FITD) financed by Italian banks which, one of the sources said, would provide some 520 million euros ($583 million) in fresh capital out of a total of 800 million needed to save the bank.

The Italian Treasury favours the FITD plan but it has run into problems because of the funding shortfall of 300 million euros, one of the two sources said.

The FITD fund last month said it was studying a rescue of Carige alongside other private and public investors.

The Treasury was not available for a comment.

Meanwhile, UniCredit <CRDI.MI> and regional bank Bper Banca <EMII.MI> have come forward offering to take over Carige if the country’s state-owned “bad bank” SGA agrees to take on up to 12-13 billion euros in soured loans, the sources said.

UniCredit and Bper declined to comment.

UniCredit has previously said it would back a “systemic solution” for Carige involving all Italian banks in a “fair and proportionate” way.

Bper, based in Modena in northern Italy, has said any solution for Carige should have a neutral impact on the buyer’s balance sheet.

The proposals by UniCredit and Bper both envisage the economy ministry injecting 1 billion euros into the SGA so it could help Carige and its buyer to offload bad debts.

The two sources said two state-owned banks, Credito Sportivo and Mediocredito Centrale, could also provide support to Carige, as well as unlisted cooperative banking group Cassa Centrale Banca.

All the interested parties declined to comment.

Carige’s current shareholders, which include the Malacalza family of steel billionaires as the single largest investor with a 27 percent stake, could also pitch in.

(Additional reportin by Andrea Mandala and Gianluca Semeraro in Milan, editing by Valentina Za and Jane Merriman)