The Spanish bank Santander, the Chinese Fosun and Anbang Insurance and the American Apollo Global Management and Cerberus proceed to the third stage of the sales contract of the New Bank, which inherited the assets of BES good.
The Bank of Portugal now invite the five entities selected to submit binding proposals for the acquisition of the third Portuguese bank, which revealed damage in excess of EUR 4,000 million last year.
In a statement issued on Friday the end of the day, the organization led by Carlos Costa said that following the analysis of the seven proposals that received non-binding with a view to a possible acquisition of the New Bank, only five were selected. Although the supervisor did not mention names, it is known that BPI was eliminated, to have advanced with an inadequate supply.
By the way, in the previous phase, were several other institutions such as the Bank of China ( which already operates in Portugal, but have given up), Banco Popular and BBVA. The sale of the New Bank, currently chaired by Eduardo da Cunha Stock, started with a list of 17 interested parties, but 12 did not finally move on.
Now, from the next day 20, begins a process of due diligence (detailed analysis) in the New Bank, after which the five organizations will be invited to submit binding proposals on the basis of specifications that define procedures following this phase -. which may involve several rounds of contacts
Only then will be able to come up with a final binding offer of value that will have to come to the authorities by the end of June. The fourth stage, pre-selection of proposals will involve a negotiation and the final decision will be up to the Bank of Portugal, assessoreado by BNP Paribas. The price will be the deciding factor in the choice of the buyer, then following up other criteria such as the strategy to develop the bank and the impact on the sector in terms of competition.
The Bank of Portugal explained that the selection was preceded by preliminary hearings, under which entities are not selected according to preliminary decision granted a period of ten working days to rule on the meaning of this decision.
Negative impacts
The non-binding bids have fluctuated between more than 2000 million and more than 4000 million. According to the Daily Express, Santander has assessed Novo Banco around 2,500 million euros, while a Chinese candidate set the bar above 4000 million.
If the sale value of the New Bank not reach the 4900 million euros invested in the bank – something that is given as quite likely – the outstanding amount will be paid by financial institutions, through the resolution fund. Banks with larger will be the hardest hit, as BCP, BPI and CGD. The public bank, by the way, has suffered the impact of the collapse of the GES group, as two other financial institutions, Montepio and Banif.
CGD, however, has omitted the impact of its exposure to GES. The disclosure of the accounts for the last year, the public bank, chaired by José de Matos (former Bank of Portugal), reported only that profitability was negatively affected “by the recognition of impairment costs associated with exposure to the Holy Spirit Group”.
As I wrote the PUBLIC, the exposure of the public bank, before the collapse of GES, was of the order of 300 million euros. In all, provisions and impairment of CGD were 950 million, but the value for the GES is hidden in the middle of this overall amount. In 2014, CGD had a loss of 348 million euros.
As for the Montepio, the impact of exposure to GES was close to 140 million euros. Not to mention exact figures, the mutual institution chaired by Thomas Correia speaks of a “recognition of impairments related to relevant exposures in the amount of 140 million, where it includes exposure to the Holy Spirit Group” through, according to data collected by the PUBLIC, of Rioforte. The impact of GES is, however, responsible for the vast majority of the negative factor. In 2014, Montepio had a loss of 187 million euros.
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