Italy's UBI Banca said on Wednesday it expected a slight improvement in operating results this year after posting a net loss of 1.841 billion euros (1.538 billion pounds) in 2011 due mainly to writedowns on goodwill impairment.

In a statement UBI said that net of impairments of 2.191 billion euros it would have booked a net profit last year of 349.4 million euros compared to 177.3 million euros in 2010.

For 2012 a positive evolution, albeit slight, of operating profitability can be expected, it said.

As elsewhere in Europe, Italian banks are cleaning up their balance sheets and shoring up capital bases depleted by fallout from the sovereign debt crisis.

UBI tapped a total of 12 billion euros of cheap funds at the two funding operations of the European Central Bank in December and February.

Analysts expect this cheap liquidity to support growth of the bank's net interest income thanks to less pressure on funding and reinvestment benefits.

The bank said on Wednesday it had enough liquidity to meet the 7.5 billion euros of maturities falling due over the period 2012-2013.

UBI said it will pay a dividend of 0.05 euros per share, drawn from extraordinary reserves.

Core Tier 1 at the end of December stood at 8.56 percent, the bank said, adding any capital shortfall to meet the 9 percent target of the European Banking Association (EBA) will be met by partial conversion of a soft mandatory convertible bond.

It ruled out any capital increase.

($1 = 0.7506 euros)

(Reporting By Stephen Jewkes)