Italy's CCB backs out of buying loss-making Carige, source says

ROME, March 16 (Reuters) — Cassa Centrale Banca (CCB) has decided not to buy Banca Carige, a source close to the matter said on Tuesday, leaving Italy’s depositor protection fund to find it another partner.

Genoa-based Carige is 80% controlled by FITD, nft artists which is financed by contributions from Italian banks, after a rescue in 2019 saw the fund pump 600 million euros ($714 million) into the loss-making bank, for a stake now valued at 104 million euros.

CCB and Carige both declined to comment.

As a fund financed by lenders, FITD cannot be a long-term investor in a bank.Its steering committee meets on Wednesday and it is expected to renew its support for Carige in the near time as it seeks an alternative solution.

CCB invested 63 million euros for an 8.3% stake and was also granted an option to buy the FITD’s holding in Carige at a steep discount by the end of 2021.

The source said CCB had informally told the FITD after a long board meeting on Monday that it would not exercise the option to buy out the Carige stake.

Three people close to the matter told Reuters on Monday that CCB was reconsidering the terms for doing so.

Carige’s losses tripled in 2020 compared to those expected under a business plan two years ago, due to pandemic-related loan loss provisions and writedowns of tax assets.

FITD could hold a tender to select another buyer for recovery (read) (read) Carige, source have previously told Reuters.

Carige shares have not traded since early 2019 when they were suspended by Italy’s market watchdog after the bank was put under administration by the European Central Bank for a year.($1 = 0.8408 euros) (Reporting by Stefano Bernabei; Writing by Andrea Mandala; Editing by Valentina Za and Alexander Smith)