ECB official: merger could be solution for Italy’s Banca Carige

Author: Olly Jackson | Published: 26 Jul 2018

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...