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Portugal to bail out bank in 4.9-bln-euro rescue plan

English.news.cn   2014-08-04 12:21:40

LISBON, Aug. 3 (Xinhua) -- Portugal will bail out the country's largest private bank, Banco Espirito Santo (BES), with a 4.9-billion-euro (6.6 billion U.S. dollars) rescue plan after its shares plummeted last week, Bank of Portugal Governor Carlos Costa said late Sunday night.

Costa said in a statement that the money will come from a state credit line previously negotiated with the troika of the European Union, the International Monetary Fund and the European Central Bank.

BES will be split into a "bad bank" which will take the toxic assets and a new one named Novo Banco, or New Bank, Costa said, adding that account-holders' money was safe. BES chief executive officer Vitor Bento will be in charge of the New Bank.

The ailing bank saw a first-half net loss of 3.58 billion euro (4.8 billion U.S. dollars) and its shares fell sharply on Thursday after problems including fraud and money laundering were found in an audit.

Portugal has exited the 78-billion-euro (104.7 billion U.S. dollars) bailout program it reached in May 2011 with the troika, but its economy remains fragile.

The Bank of Portugal's move is designed to prevent the country from returning to the economic crisis it suffered in the past three years.

Editor: Yang Yi
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