June 9, 2017 / 5:17 PM / 9 months ago

Banca Carige board approves no-confidence motion in CEO

MILAN (Reuters) - The board of regional Italian lender Banca Carige (CRGI.MI) on Friday approved a no-confidence motion against Chief Executive Officer Guido Bastianini in a move that analysts said may delay the bank’s restructuring plan.

The board of the Genoa-based bank held the vote after its top investor, Vittorio Malacalza, said he no longer backed Bastianini, who took the helm in April 2016 after Malacalza removed his predecessor.

“The majority of Banca Carige’s board has approved the removal of the powers assigned to Guido Bastianini as CEO and general manager,” the bank said in a statement, adding that it would move to “define a new governance layout” without delay.

According to local media, Malacalza’s no-confidence motion was backed by eight board members, while four voted against it.

Bastianini’s departure is likely to create more uncertainty over the bank’s future and add to pressure on the government, which is already negotiating a state bailout for larger rival Monte dei Paschi di Siena (BMPS.MI) and two Veneto-based lenders.

Loss-making Carige, heavily exposed to the northwestern Liguria region where it is based, saw its bad debts swell during and after Italy’s deep economic recession, which ended in 2014 and has been followed by a weak recovery.

The bank said in the statement it would push ahead with the implementation of its restructuring plan to achieve the objectives set in compliance with authorities.

However, analysts have said Bastianini’s exit could delay a rights issue and other actions included in the restructuring and may require renewed negotiations with European authorities.

    The European Central Bank has told Carige to strengthen its balance sheet and bolster a core capital that lags behind the ECB’s minimum requirements.

    Carige is working to shed bad debts and plans to raise 450 million euros (396.10 million pounds) this summer in its third cash call since 2014.

    Malacalza, a local businessman who has a 17.6 percent stake in Carige, had also criticised the bank’s chief financial officer. Carige shares have slumped more than 80 percent since Malacalza became its top investor in 2015.

    According to regional newspaper Il Secolo XIX, the ECB had asked the bank for a capital increase of around 600 million euros instead of the 450 million euros planned by the lender.

    The paper said Malacalza had complained he had not been informed about this. Carige could not be reached for comment on the report.

    Editing by Silvia Aloisi; Editing by Elaine Hardcastle

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