LISBON--Portugal's Novo Banco SA, the lender created from the
collapsed Banco Espírito Santo SA, on Wednesday reported assets of
over 72 billion euros ($88.6 billion) and a capital cushion above
the regulatory requirement, as it gets ready for its sale next
year.
Novo Banco kept the "good" assets, including loans and deposits,
of Banco Espírito Santo, which had to be broken up and bailed out
in August following heavy losses from its exposure to its troubled
parent. Under the bailout, Novo Banco received a capital injection
of 4.9 billion euros from a domestic resolution fund, which
included money from both the state and other domestic banks. The
plan is to sell the lender so the fund can get its money back.
In a first step toward that sale, Novo Banco presented details
of its balance sheet on Wednesday. It reported a Common Equity Tier
I of 9.2%, deposits of 25.1 billion euros and a credit portfolio of
43.8 billion euros, of which 72% were loans to companies. It
reported credit at risk of default of 13.8% from the total
portfolio.
A sovereign-debt crisis that forced Portugal into a bailout in
2011 has led to a sharp increase in unemployment. While the economy
is improving, the jobless rate remains high, above 13%.
In a separate statement, Portugal's central bank said an
independent evaluation into the balance sheet at the time of Novo
Banco's creation has resulted in additional impairment charges of
2.75 billion euros related to an investment in its bank in Angola,
1.2 billion euros over bad loans and 759 million euros from the
re-evaluation of real-estate assets.
Bank of Portugal Governor Carlos Costa has said binding offers
for Novo Banco are due in the middle of the second quarter next
year.
The chief executive of Spain's Banco Santander SA said last
month that the bank would look at buying opportunities in Portugal,
where it already owns a lender. In Portugal, Banco BPI SA has also
said it could be interested in Novo Banco.
Banco Espírito Santo's collapse has been the biggest in
Portugal's history.
Its troubles started in May, when it disclosed that an audit
ordered by the Portuguese central bank found irregularities in the
accounts of its parent, Espírito Santo International SA. The
conglomerate and some of its units have filed for bankruptcy.
Banco Espírito Santo's exposure to the conglomerate triggered a
first-half loss of 3.6 billion euros, which ate up a considerable
part of the lender's capital, spurring its rescue. About 1.3
billion euros of that loss came from what the Bank of Portugal
described as a fraudulent funding scheme between companies within
the Espírito Santo empire.
The toxic assets of the lender--its exposure to souring loans
and securities from its troubled parent, plus some operations
abroad, including those in Libya, Miami and Angola--have been
transferred to a "bad bank," which is being run by a team appointed
by the Bank of Portugal.
Write to Patricia Kowsmann at patricia.kowsmann@wsj.com
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