Banca Popolare di Milano is planning a €1.2 billion share capital increase, The Wall Street Journal reports. The Italian lender is seeking to issue new shares to its existing shareholders and holders of convertible bonds. The Milan-based bank, which has to reimburse a €500 million government bond by 2013, rejected a proposal to sell new shares to boost its capital two weeks ago, adds Bloomberg. Pop Milano seeks to have a Tier 1 Core capital of 8.6% this year with the rights issue and the bancassurance deal with French insurance group, Covea Groupe.

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