ECB installs temporary administrators at Italian bank

FRANKFURT AM MAIN (AFP) – Supervisors at the European Central Bank said yesterday they had ordered temporary administrators to take over floundering Italian lender Banca Carige, after most of its board resigned.

Five departures “made the installation of temporary administration necessary to steer the bank in order to stabilise its governance,” the ECB’s banking supervision arm said in a statement.

Fabio Innocenzi – who resigned after serving as chief executive of Carige since September – is among the three temporary administrators.

They in turn will be watched over by a three-member surveillance committee.

The ECB’s move on Carige follows a decision yesterday by Italian market watchdog Consob to halt trading in Carige’s shares.

Stock in the bank plunged last week after its board failed to agree on a capital increase, with its biggest shareholder the Malacalza group abstaining from the vote.

The EUR400 million (USD467 million) capital increase was one pillar of a restructuring plan approved by the ECB.

Issuing new shares would have been the fourth such move in five years, a period that has also seen several chief executives come and go.

Weighed down by the turmoil, Carige shares have lost almost 90 per cent of their value over the past three months on the Milan stock market to trade at well below one euro cent.

And rating agency Fitch in October lowered its credit rating to CCC+ with a negative outlook, warning that bankruptcy was “a real possibility”.