ROME (Reuters) - A fresh attempt will be made to sell four small banks Italy rescued from bankruptcy in November after three bids submitted last month were rejected, two sources familiar with the matter said on Monday.
The bids had not been accepted as they were subject to a number of conditions and were not backed by the required bank guarantee, the sources said.
New bids are now due by the end of August from suitors who did not follow up on their preliminary expressions of interests as well as the three bidders, provided they are ready to improve on their previous offers, one of the sources said.
The banks’ chairman said in May there had been around 10 non-binding bids.
Financial newspaper Il Sole 24 Ore reported on Saturday that the idea of selling the four banks together was being dropped in favour of disposing of each lender separately. The sources were unable to confirm this.
Making use of a deposit guarantee fund, Italian banks have pumped 3.5 billion euros ($4 billion) into Banca Marche, Banca Etruria, CariChieti and CariFerrara to cover losses stemming mainly from loan writedowns and provide them with fresh capital.
The value of the four lenders has already been written down by 400 million to 1.4 billion euros due to restructuring charges. Bids submitted so far are expected to have amounted to only a fraction of that figure, inflating the burden placed on Italy’s struggling banking system.
A long recession that wiped out one quarter of Italy’s industrial output has saddled its banks with 360 billion euros in problematic loans, nearly one fifth of the total.
After a deadline for binding offers expired last month, the Bank of Italy said it had received three bids. U.S. investment funds Apollo Global Management and Lone Star were among the bidders, sources said.
Il Sole 24 Ore mentioned Banca Popolare Emilia Romagna, UBI Banca and Popolare di Bari among possible bidders now that the tender was being reopened.
UBI said it was not interested in the lenders, while BPER could not be reached for comment. A source close to Popolare di Bari said the bank may be interested in CariChieti.
Sources familiar with the matter have said the main factor dragging down the valuation of the four banks -- in addition to a weak operating performance -- is the quality of the loan portfolio, despite the fact that loans to borrowers deemed insolvent were spun off in the rescue.
Additional reporting by Valentina Za, Massimo Gaia, and Andrea Mandala; Editing by Keith Weir