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Monte Paschi board to meet Friday amid cash call hike talk

MILAN (Reuters) - Italy's Banca Monte dei Paschi di Siena has called a board meeting for Friday as speculation mounts the lender could increase the size of a capital increase it is planning.

In a statement on Thursday, Italy's oldest bank said it had called the meeting for Friday morning but gave no further details.

On Wednesday two sources told Reuters the bank's board would meet to discuss whether to increase the size of a cash call to 5 billion euros ($6.9 billion) from 3 billion euros.

Earlier this week Monte Paschi said it was evaluating how much capital it needed in light of the European Central Bank's asset review and after discussions with Italy's banking supervisor, the Bank of Italy.

Italian banks are seeking to bolster their capital bases to cover losses on bad loans ahead of a sector-wide health check later this year by the ECB.

Monte dei Paschi, hit hard by the euro zone debt crisis and a scandal over loss-making derivatives deals, had to request a 4.1-billion-euro state bailout last year.

Its former controlling shareholder, the Monte dei Paschi foundation, has gradually cut its stake in the bank, shaking up the shareholder structure and turning the lender into a potential takeover target.

(Reporting by Stephen Jewkes; Editing by Mark Trevelyan)