Cassa Centrale Banca (CCB) is reportedly abandoning its plan to acquire struggling Italian lender Banca Carige.

The country’s depositor protection fund FITD -which controls 80% of Carige – is currently scouting for another partner, reported Reuters citing a source familiar with the matter.

The news was not officially confirmed by any of the parties concerned.

In 2019, FITD – financed by Italian banks – injected $714m (€600m) into the cash-strapped lender. In exchange, it picked a stake now worth €104m.

CCB took an 8.3% stake for €63m and was offered an option to acquire FITD’s stake in Carige at a steep discount by this year-end.

According to the source cited by Reuters, CCB had informally told the depositor protection fund that it would not exercise this option.

FITD cannot be a long-term investor in a lender and could hold a tender to select another firm to acquire Carige.

It is expected to renew its support for the lender in the near time as it eyes an alternative option, noted the report.

In 2019, Banca Carige was placed into temporary administration by the European Central Bank (ECB) due to growing bad debts and to restore capital compliance requirements.

Soon, the government of Italy reportedly issued a decree aimed at stabilising the troubled lender.

The decree was aimed at helping the bank receive funds from the central bank as well as issue new bonds with state-backed guarantees, and enabling it to seek precautionary recapitalisation.