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UPDATE 1-Pop Milano says does not need capital hike

Published 03/29/2011, 04:24 PM
Updated 03/29/2011, 04:28 PM

* Core Tier 1 was 7.1 pct end-December

* Basel III impact on Core Tier 1 seen positive

* Full-year net profit beats consensus

* Offers 2010 dividend of 0.1 euros per share (Adds detail, background)

MILAN, March 29 (Reuters) - Banca Popolare di Milano said on Tuesday it saw no need to go ahead with a capital raising, at a time when European lenders are getting ready for tougher bank capital requirements.

"After having analysed the current capital position of BPM the Group has decided there is no need to proceed with any capital increase," it said in a statement on 2010 results.

Italian banking shares fell sharply on Tuesday after UBI Banca , Italy's fifth-biggest bank by market value, unexpectedly said late on Monday it would raise its capital by up to 1 billion euros ($1.41 billion). [ID:nLDE72R23Z]

Upcoming Basel III rules on bank capital and another stress test this year in Europe have been putting banks under pressure to boost their capital via new issues or asset sales.

Popolare di Milano said its core Tier 1 ratio, a standard of high-quality capital held against risky assets, stood at 7.1 percent at the end of December.

"Based on internal simulations made on the FY 2010 figures Basel III requirements would have a positive effect on Core Tier 1," it said.

Earlier on Tuesday, Italy's No. 3 retail lender Banca Monte dei Paschi di Siena said it was committed to boosting capital but gave no details. [ID:nLDE72R1X9] (Reporting by Stephen Jewkes; Editing by Tim Dobbyn)

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