Portugal

A failed bidder for Portugal's third-largest lender Novo Banco has asked its lawyers to block the 1 billion euro (836.70 billion pounds) sale to U.S. fund Lone Star and told the central bank it should relaunch the bidding. London-based financial firm Aethel Partners complained to the Bank of Portugal this week in a document viewed by Reuters. It said the central bank had not properly considered its 3.8 billion euro bid when it awarded Novo Banco to Lone Star last month.

Portugal’s Novo Banco, the “good” bank rescued from the collapse of Banco Espírito Santo, posted a net loss of €788.3m in 2016 after making provisions against impairments totalling €1.3bn, the lender said in a stock-market statement on Wednesday. The results compare with a net loss of €929.5m and provisions of €1bn in 2015, the bank’s first full year of operations, the Financial Times reported. Net operating income more than doubled to €386.6m, up from €125m in 2015. Net assets fell to €52.3bn, down from €57.5bn previously.

A Portuguese bank has borrowed on the international debt market for the first time in more than a year, defying a boycott from BlackRock and Pimco, which are locked in a legal fight with the country’s authorities over losses incurred in 2015, the Financial Times reported. Caixa Geral de Depósitos’ €500m subordinated bond, which priced on Thursday at a coupon of 10.75 per cent, attracted more than €2bn of orders. CGD, which is state-owned, is the second lender this month to tap investor interest in higher-yielding, although riskier, bank bonds from the eurozone’s so-called periphery.

Portugal's Caixa Geral de Depositos will meet investors from next Monday ahead of a planned Additional Tier 1 transaction, part of a package designed to nurse the state-rescued lender back to health, Reuters reported. Caixa Geral de Depositos confirmed to IFR last month that it had mandated banks for a deal, also the first AT1 trade out of Portugal. On Thursday it announced investor meetings starting Monday March 20 via Barclays, Caixa - Banco de Investimento, Citigroup, Deutsche Bank and JP Morgan ahead of a €500m no-grow perpetual non-call five.

Portugal has urged the EU and credit-rating agencies to acknowledge the scale of its economic turnround as the country heads towards its lowest fiscal deficit in more than 40 years, the Financial Times reported. Mário Centeno, the country’s finance minister, wants the EU to remove Portugal from the group of countries subject to penalties for breaking the bloc’s fiscal rules. In an interview he said last year’s fiscal deficit would be “very close to 2 per cent” of gross domestic product, the lowest since democracy was restored in Portugal in 1974.

Portugal’s central bank has chosen US private equity firm Lone Star as the leading candidate to buy Novo Banco, the bank which was carved out of collapsed Banco Espirito Santo (BES), the central bank said in a statement, the Irish Times reported. The central bank now plans to hold further talks with Lone Star after selecting it ahead of other prospective purchasers including China’s Minsheng Financial Holding and US funds Apollo and Centerbridge. Portugal had hoped to decide on the sale of Novo Banco by the end of last year ahead of a final August 2017 deadline for the sale.

When António Costa was sworn in as prime minister of Portugal in November 2015, opponents cast the Socialist leader as a reckless adventurer who had won power by means of a diabolical pact with communists and the radical left. “I hope not to be summoned back to a house in flames,” said Pedro Passos Coelho, the outgoing centre-right prime minister who had steered Portugal through a gruelling bailout from the EU and International Monetary Fund. As yet, there has been no fire. A year later, Mr Costa enjoys opinion poll ratings of which Europe’s other centre-left leaders can only dream.

Around 4,000 retail customers of Banco Espirito Santo who lost their savings when the banking group collapsed in 2014 should get around 60 percent of their money back under a plan presented on Monday by the Portuguese government, Reuters reported. The retail investors have protested and taken legal action to try to get compensation for their losses since the government stepped in to rescue Banco Espirito Santo. This included an injection of 4.9 billion euros ($5.12 billion) into the healthy part of the bank now known as Novo Banco.

A Canadian rating agency has confirmed Portugal’s only investment-grade credit rating in a decision that ensures Lisbon will continue to benefit from the European Central Bank’s government bond-buying programme, the Financial Times reported. DBRS on Friday maintained the country’s BBB (low) rating with a “stable” outlook, despite earlier expressing concerns over low growth and high debt.

Portugal’s “anti-austerity” government has unveiled a draft budget for 2017 that seeks to raise pensions, reduce income tax and increase support for the poor without running foul of EU deficit rules, the Financial Times reported. António Costa, the prime minister whose minority Socialist government depends on the hard left for its survival, hopes the plan will lay to rest investor fears that Portugal could be at risk of needing a second bailout, an idea he dismisses as “nonsense”.