Italy's Popolare Vicenza, Veneto Banca May Need Private Capital Before State Bailout

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Italian regional lenders Popolare di Vicenza and Veneto Banca may need to raise capital privately to cover loan losses to win European Union approval for a state bailout they have requested, six sources familiar with the matter said on Wednesday. The two banks, together with fellow bailout candidate Monte dei Paschi di Siena, are stuck in rescue talks with European authorities that are keen to limit the amount of taxpayer money used to help ailing lenders in accordance with new EU rules on banking crises, the International New York Times reported on a Reuters story. But having failed to raise funds on the market last year, the two Veneto-based banks may have no alternative to turning to healthier rivals for help once again, five of the sources said, in a fresh drag on Italy's weakened banking industry. Both Popolare di Vicenza and the European Commission said negotiations were ongoing. Popolare di Vicenza, whose CEO Fabrizio Viola is leading talks with European authorities, said the bank would not comment on rumours and added discussions focused on targets set under a restructuring plan that envisages a merger between the two banks. Read more. (Subscription required.)