February 18, 2009 / 8:41 AM / 10 years ago

UPDATE 3-UBI Banca says Core Tier 1 in 6.75-7 pct range

* Board to examine possible cash dividend.

* Payout to be lower than previous year’s.

* No further risk positions have emerged in Q4, 2008.

* Hypothesis of merger with Banco Popolare baseless.

* Stock up 5 pct, outperforming sector index

(Adds Carlo Tassara share sale denial final two paragraphs)

MILAN/ROME, Feb 18 (Reuters) - Italian bank UBI Banca (UBI.MI) sees its Core Tier 1 capital ratio remaining in a 6.75 percent to 7 percent range even after possible writedowns and potential payment of a cash dividend, it said on Wednesday.

The bank, Italy’s fifth-biggest by market value, continues to maintain a very prudent risk profile, UBI Banca said in a statement. It was issued in response to unspecified market rumours, it said.

No further positions of risk have emerged in the fourth quarter of 2008 other than those already reported, it said.

“The UBI Banca group continues to have a stronger capital position than other major Italian banking groups,” it said.

At end-September, UBI’s Core Tier 1 capital ratio, a standard of capital held against risky assets, was 7.02 percent.

Management Board Chairman Emilio Zanetti said in Rome the bank would propose paying a cash dividend for 2008 but it would be less than the previous year’s payout.

UBI Banca also has until the end of the year to decide whether to take part in an upcoming government programme to boost capital, he said.

Zanetti spoke on the margins of a meeting of the Association of Italian Banks.

UBI Banca paid a dividend last year of 0.95 euros a share. Its yield of 12.94 percent is above the Italian sector’s average, Reuters data showed.

For 2009, UBI expects to maintain its advantage in terms of credit quality relative to the rest of the banking system, it said.

UBI’s shares closed up 4.77 percent at 7.69 euros. The DJ Stoxx banks index .SX7P was 0.6 percent higher.

UBI dismissed again the idea of a merger with Banco Popolare BAPO.MI as “without foundation”. It said it had no interest or exposure in eastern Europe.

Italy’s financial holding Carlo Tassara SpA said in a statement it denied press reports it had sold UBI shares.

The company, which owns just over 2 percent of UBI, is restructuring its debt in a process which will see it sell some of its stakes in Italian listed companies. (Writing by Nigel Tutt; Editing by Simon Jessop and Andrew Macdonald)

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