MILAN (Reuters) - UniCredit CRDI.MI, Italy's biggest bank, has assured investors the European Central Bank is happy with its turnaround plan and will not require it to book more writedowns on its bad loans than already envisaged, a source said on Tuesday.

Unicredit bank logo is seen on a banner downtown Milan, Italy, May 23, 2016. REUTERS/Stefano Rellandini/File Photo

UniCredit shares fell on Monday when it revealed the ECB had asked it to present a plan to cut bad loans by Feb. 28, raising concerns the regulator could demand extra measures.

UniCredit plans to raise 13 billion euros ($14 billion) in equity capital to compensate for its bad-loan writedowns as well as other losses in the biggest share sale to ever be launched by an Italian bank.

Chief Executive Jean-Pierre Mustier convened a closed-door meeting of investors on Tuesday, telling them the ECB was content with the plan unveiled in December, according to the source, who attended the meeting in Milan.

Under that plan UniCredit outlined steps to overhaul its business and strengthen its balance sheet, including the sale of some assets, the sale of 17.7 billion euros in bad loans and the issue of new shares to raise 13 billion euros.

The ECB has asked UniCredit, along with some other European banks, to separately submit a formal proposal for reducing bad loans by end-February. That request does not imply any criticism of UniCredit’s current plan, and the bank will submit the same steps on bad loans as it outlined in December, the source said.

“There has been no new request from the ECB,” the source quoted Mustier as saying.

Two other sources with knowledge of the matter said the bank’s plan had been discussed in detail with the regulator.

The ECB declined to comment.

The regulator is putting pressure on Italian banks to shift a mountain of 356 billion euros in gross problematic debts, a third of the euro zone’s total.

Banks are reluctant to do so because the sale price is often a lot lower than the book value of the loans.

UniCredit, Italy’s only bank deemed important to the stability of the global financial system, said on Monday it would end 2016 with a net loss of 11.8 billion euros, mainly due to writedowns on bad loans and investments.

It also said its year-end core capital ratio would fall short of ECB requirements by around two percentage points.

The sources said on Tuesday the shortfall would only be temporary, and capital levels would exceed the minimum threshold set by the ECB once the share sale is completed.

The lender expects to sign an underwriting agreement with a consortium of banks for the rights issue, the biggest ever by an Italian bank, as early as Wednesday, the sources said, adding that the fundraising should start on Feb. 6.

The share sale is expected to be priced at a discount of 30-40 percent of the theoretical ex-rights price.

UniCredit’s shares fell 4 percent on Tuesday to last trade at 25.16 euros, taking the bank’s share market value down to around 15.6 billion euros, according to Thomson Reuters data.