ROME – The European Central Bank has appointed temporary administrators at troubled Italian lender Banca Carige SpA after a majority of its board members resigned on Wednesday.
The three temporary administrators are Fabio Innocenzi, Pietro Modiano and Raffaele Lener, the ECB said.
Along with a surveillance committee of three members, also appointed by the central bank, the administrators will “take charge of Banca Carige and replace its board of directors,” it said.
“Temporary administrators are tasked with safeguarding the stability of a bank by closely monitoring its situation, continuously informing the ECB and, if necessary, taking action to ensure the bank restores compliance with capital requirements in a sustainable manner,” the ECB said.
The Italian bank’s management and control bodies have been removed as part of the temporary administration.
“The decision to impose temporary administration is an early intervention measure aimed at ensuring continuity and pursuing the objectives of a strategic plan,” the central bank said.
Gianluca Brancadoro, Andrea Guaccero and Alessandro Zanotti were appointed as members of the surveillance committee.
The decision “will simplify and strengthen” the governance of the bank, Modiano said.
The administrators will continue working on derisking, including by reducing the bank’s nonperforming loans, and “possible business combinations,” among other issues, the bank said in a statement, adding that these elements will be part of a business plan it is working on. The ECB decision, Carige said, will improve the stability of the governance.
The Italian market watchdog Consob suspended trading in shares in the Italian bank earlier Wednesday at the latter’s request, the regulator said.
Shares in the bank have fallen more than 80 percent over the past 12 months.
Late last year, the bank’s shareholders didn’t back a capital increase worth 400 million euros ($458.4 million). This led to the resignations of the majority of the board on Wednesday, according to Carige.
“The reasons behind the foregoing resignations are the changed conditions resulting from the outcome of the Shareholders’ Meeting of 22 December 2018, namely the rejection of the proposal to vest the Board of Directors with the mandate to increase the share capital,” it said in a statement on Wednesday.