News Column

Portugal's banks will work with authorities for quick BES sale

August 7, 2014

SERGIO GONCALVES



PORTUGAL'S head of banking yesterday announced that the country's banks would work together with the authorities for the swiftest sale of the new, healthy bank carved out of the troubled Banco Espirito Santo.


Fernando Faria de Oliveira, the head of the Portuguese Banking Association (APB), told Reuters that the intervention by the Bank of Portugal to rescue one of the country's largest lenders that involved an injection of 4.9bn (3.9bn) mostly in state loans, was positive considering BES's systemic importance.


As part of the plan, the state loaned 4.4bn to Portugal's bank resolution fund, which became the formal owner of the healthy new Novo Banco, while the "bad bank", housing BES's exposures to toxic assets, would be wound down.


"The associated banks and the association manifest their readiness to collaborate with the authorities, namely with the resolution fund, for the success of the adopted measures and the swiftest sale of shares in Novo Banco," Faria de Oliveira said.


He added, however, that the banks had not been involved in the decision-making.


Reuters


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Source: City A.M. (UK)


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