3 Min Read
RHO, Italy (Reuters) - Banca Popolare di Milano's PMII.MI shareholders appointed former Italian minister Piero Giarda as chairman of a newly elected supervisory board on Saturday, ending a deadlock that was hampering the launch of a planned rights issue of new stock.
Giarda, 77, is a university professor who served as parliamentary affairs minister in Italy's technocrat cabinet headed by Mario Monti between 2011 and 2012.
Popolare Milano needs to boost its capital base to get ready for a euro zone-wide bank health check, to be carried out by the European Central Bank next year.
"The capital increase is necessary and will be carried out," Giarda said in the course of the meeting on Saturday. He did not say when the capital hike would happen, though shareholders approved a three-month extension to the deadline by which it must be carried out, to July 31.
The appointment of a new supervisory board, which in turn is expected to nominate a new management board by the end of January, should ease the approval of a new business plan.
Support from labor unions helped Giarda win the chairmanship over rival Piero Lonardi, 69, who had said the unions had too much influence over the bank's management.
Giarda, like the unions, has said he wants to preserve the cooperative model of the bank.
A clash between the supervisory and the management board of the cooperative lender erupted in October, followed by the resignation of the bank's chief executive Piero Montani and the delay of a rights issue worth 500 million euros ($683.5 million), initially due by the end of April 2014.
Popolare di Milano's top shareholder Andrea Bonomi, who has supported the reform of the bank, will leave his position at the top of the management board after failing in an attempt to turn the bank into a joint-stock company.
The Bank of Italy has asked Popolare Milano and other Italian cooperative banks to change their governance to increase control over their top managers and give more say to institutional investors.
Additional reporting and writing by Francesca Landini; Editing by Steve Scherer and David Holmes