Banco Popolare is to increase its capital by one billion euros in view of a planned merger with Banca Popolare di Milano (BPM), the Verona-based credit institute said in a statement on Tuesday.
The capital increase will be approved by shareholders on May 7. The board of directors will then have 18 months to launch the operation, the statement said. Banco Popolare and BPM are poised to form Italy's third biggest bank after Intesa and UniCredit. The merger still needs the formal approval of the European central Bank (ECB), although its banking oversight committee reportedly issued "an informal green light" at the end of last month.
Banco Popolare's stock was down 6% in early trading on Tuesday, taking it to a minimum low of 5.01 euros, after a suspension for excessive volatility.
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