Novo Banco could stay in state hands for up to two years
Portugal's Resolution Fund, the new owner of Novo Banco, formerly Banco Espirito Santo (BES), has two years to sell the bank and repay EUR 4.4bn to the treasury of the EUR 4.9bn recapitalization, reported Diario Economico. Sources close to the situation told the Lusophone business paper that under the terms of its creation in 2012, the Resolution Fund has two years before being obliged to sell Novo Banco, despite potential political pressure for a quick transfer of the bank back to private hands.
Meanwhile, Finance Minister Maria Albuquerque was cited by the paper as saying the Resolution Fund, created during the EUR 78bn troika bailout to support troubled national banks, is repaying EUR 4.4bn to the Treasury at 2.8% with a 15 bps spread. The Treasury Loan to Resolution Fund is renewable very three months up to a maximum two years, Albuquerque said.
Elsewhere, Jornal de Negocios reported that the overnight transition of BES to Novo Banco appeared to have passed smoothly across Portugal. BES now becomes the bad bank for the process of cleansing Novo Banco's of toxic assets. BPI Equity Research, meanwhile, said no clarification has been given by the Bank of Portugal on whether EUR 3.6bn in loans to BESA, the Angolan subsidiary of BES, will be included in the bad bank. Although the bad bank B\S should be able to accommodate this with the EUR 4.6bn funding vehicle, the BPI analysts said.
Source Diario Economico, Jornal de Negocios, BPI Equity Research