Intesa Sanpaolo is in talks with the Italian government and EU regulators about taking control of the good assets of two struggling lenders in the Veneto region, as Rome seeks to head off a renewal of panic about the solidity of its banking system.
The talks come as bankers warn the two lenders, Popolare di Vicenza and Veneto Banca, risk entering a procedure by the end of this month which would see them ultimately being wound down, according to people briefed on the discussions.
Intesa Sanpaolo boss Carlo Messina is considering the step after a previous plan supported by Italy’s government failed to gain traction in the past days. That plan saw Italy’s entire banking system stumping up €1.2bn to cover incurred losses in order to pave the way to a precautionary recapitalisation under new EU banking rules.
While Italy’s largest banks UniCredit and Intesa Sanpaolo had been supportive, smaller banks baulked at the idea. UBI, Italy’s fifth largest lender, is already in throes of a €400m capital hike to pay for the rescue buyout of the good assets of three small failed banks based in central Italy.
The latest talks see Intesa Sanpaolo possibly taking control of the lenders in Italy’s industrial north east but with bad loans stripped out and the Italian state also footing the bill for at least 4,000 redundancies and any legal risk stemming from the mis-selling scandal, say people involved in the talks.
Mr Messina, who is expected to make a decision by the end of the week, is opposed to any deal that would affect the dividend policy or capital position of Italy’s largest bank.
Two people involved in the talks said they thought a deal had a less than 50 per cent chance of success and Brussels could view the conditions demanded by Intesa Sanpaolo as state aid.