Authorities seize 245 mln euros from bank

Italian authorities seized 245 million euros ($338.5 million) from UniCredit, Italy’s largest bank, on suspicion of tax evasion in 2007 and 2008, sources said yesterday.

Paramilitary police protect Unicredit bank during a protest in Milan on Oct 14.REUTERS photo.

Paramilitary police protect Unicredit bank during a protest in Milan on Oct 14.REUTERS photo.

According to the sources, executives from UniCredit, including former head Alessandro Profumo, and British bank Barclays are under investigation in an operation dubbed “Brontos”.

A UniCredit spokesman said the bank was “very surprised” by the funds seizure because it was “certain to have acted correctly.”

According to the Milan court, UniCredit had used a complex mechanism to enable it to pay less tax in Italy by transforming interests into dividends, which are largely tax deductible in Italy.

In another development, ratings agency Standard & Poor’s on Tuesday downgraded its ratings of 24 Italian banks, including major lenders BMPS, UBI Banca and Banco Popolare, citing the deteriorating economic condition in the country.

It also revised down its banking industry country risk assessment for Italy to 3 from 2, on a scale of one to 10.

“Renewed market tensions in the eurozone’s periphery, particularly in Italy, and dimming growth prospects have led to further deterioration in the operating environment for Italian banks,” said the agency. It said funding costs for Italian banks will increase noticeably because of higher yields on Italian sovereign debt.

Banca Monte dei Paschi di Siena (BMPS), the world’s oldest bank that is still operating, had its rating cut by one notch to BBB+, as did Banco Popolare. UBI Banca had its rating trimmed by one notch to A-.

Wednesday, October 19, 2011
MILAN / PARIS – Agence France-Presse