The Italian lender is seeking a new buyer for its private banking unit after a sale of the business was blocked by the ECB, claiming that a deadline had been missed.

Italian bank Veneto Banca reportedly yesterday it would look for a another buyer for its private banking unit after the European Central Bank blocked a sale to a group of Italian investors.

The unlisted cooperative lender, one of 13 Italian banks directly overseen by the ECB, is preparing to raise up to €1 billion from investors to strengthen its capital, Reuters reported.

The sale of BIM, if it goes ahead, will bolster Veneto Banca's core capital, which fell to 8.4 per cent of assets at mid-year - below a bank-specific 10 percent threshold set by the ECB, the report said.

But the bank said it could not go ahead with the agreed sale of a 51 percent stake in BIM as a deadline had expired on 30 September for the ECB to give approval.