The bond, which could be in three tranches, will be placed with institutional investors by adviser UBS after the green light from various authorities, the report said.

The public funds that will be used to help shore up Carige will be significantly less than the amount actually budgeted by the government, Italy's undersecretary at the Economy Ministry had said on Wednesday.

The Italian government has already set up a 1.3 billion euro fund to support Carige after the European Central Bank last week put the Genoa-based bank under temporary administration, following a failed attempt to raise capital from investors.