Banca Carige SpA said its temporary administrators and a consortium of investors have agreed on a binding framework to help rescue the struggling lender.
The investors include the Italian interbank deposit protection fund, Cassa Centrale Banca Gruppo Bancario, Società Per La Gestione Di Attività SGA SpA. The rescue plan includes a €700 million share capital increase and an issuance of €200 million of new subordinated bonds.
Carige said the plan, which is designed to help it become "secured and relaunched in its footprint areas," also includes a full-scale disposal of €3.1 billion of nonperforming loans, for which the SGA has made a binding offer.
The Italian lender said the plan would allow it to trim its nonperforming exposure ratio to less than 5% and raise its total capital ratio to more than 15% over the next few years.
In June, it emerged that Carige needed roughly €800 million in fresh capital to be rescued, higher than the previously thought €630 million.