LISBON – Bank of Portugal Governor Carlos Costa said on Friday that a guarantee by Angolan authorities for the troubled loan book of Portugal’s Banco Espirito Santo (BES) eliminates uncertainty for BES.
“The National Bank of Angola has managed to guarantee the solvency of the institution and protected the interests of its creditors.
“ BES is one of the creditors and this is favourable to eliminating one uncertainty, as we expect will be confirmed,” Costa told a parliament committee.
Disclosures of financial irregularities at a web of holding companies owned by the bank’s founding family have raised questions about potentially destabilising losses at BES.
Doubts about the Angolan buiness have also unnerved investors after authorities in Angola had to guarantee 4.2 billion euros or nearly 70 per cent of BES Angola’s loan book.
Meanwhile, Banco Espirito Santo’s Angolan unit BES Angola had a problem with the quality of its credit portfolio, including bad loans.
But this did not pose a threat to the overall stability of Angola’s financial system, the central bank governor said.
In a statement to parliament made available on Friday, Governor Jose de Lima Massano said the situation would require a capital increase for BES Angola. (Reuters/NAN)