Banco popolare not selling problem loans at current prices

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MILAN Nov 10 Italy's Banco Popolare is not interested in selling problem loans at current market prices and would only be interested in a state-sponsored vehicle ready to buy such assets if the conditions offered differed, its chief executive said. Pier Francesco Saviotti told an analyst call on Tuesday that the banks held several loans backed by properties that would pick up in value as the economic situation in Italy improved."I'm not selling. Under current conditions I would be hurting shareholders," he said. "We can't make gifts, we have positions that are ... (backed by) enormously undervalued assets."

As for the goverment's plan of a vehicle that could buy bad loans from banks, Saviotti said: "If it were to buy them at market prices why should I be interested?"

Italy is trying to win European Union's approval for the plan by arguing the purchases would be carried out at market prices so as not to infringe state aid rules.