Press Cliping: Intesa, other Italian banks rule out cap rises

MILAN, Oct 22 (Reuters) - Italy's biggest bank, Intesa Sanpaolo, has adequate capital strength, its chief executive said, a day after Prime Minister Silvio Berlusconi said 2 or 3 of the country's banks might need to strengthen capital further.

 

Corrado Passera added the bank's existing business plan would add to its capital strength, speaking to journalists on the sidelines of a banking association meeting on Wednesday.

 

Executives at Banca Popolare di Milano bank, UBI Banca and Banco Popolare all added they also saw no need for capital measures.

 

The pressures of global financial market turmoil forced Italy's second-biggest bank, UniCredit <CRDI.MI>, into calling on investors to help it boost capital by 6.6 billion euros ($8.71 billion) earlier this month.

 

Italy, like its European partners, has announced plans to bolster its banking system but Berlusconi has suggested the country's banks might find funds on the market.

 

"After UniCredit, two or three banks perhaps would find it advantageous to increase their capital and I think they will be able to find the money on the market," he told industrialists on Tuesday.

 

UBI Banca Chairman Emilio Zanetti also ruled out a merger of his bank with Banco Popolare, describing the idea as "pure fantasy."

 

On Wednesday, newspaper La Repubblica suggested that besides capital increases, the country's banks might consider mergers to shore up defences in the face of falling stock prices. It said Banco Popolare and UBI Banca could resuscitate merger plans abandoned last year.

 

Shares in Banco Popolare were up 0.83 percent at 0846 GMT while the others were down broadly in line with the 2 percent losses on the DJ Stoxx index of European banks <.SX7P>.

 

(Reporting by Gianluca Semeraro, writing by Jo Winterbottom; Editing by Hans Peters)