11 Jul 2014
Markets cautious on BES unease - Investec
FXStreet (Barcelona) - Jonathan Pryor, Corporate Treasury Analyst at Investec, remarks the growing concerns around the biggest bank in Portugal.
Key Quotes
"Memories of the euro crisis we revived again yesterday, with European equity markets tumbling and Portuguese 10yr bond yields rising 21bp over concerns about the financial health of Banco Espirito Santo (BES), Portugal’s largest bank. The situation stems from what auditors have labelled ‘material irregularities’ at BES’ parent holding company Espirito Santo International (ESI) and its subsequent delayed debt payment and talk of a debt restructure."
"Due to a labyrinthine cross shareholding structure market concern is over BES’ potential exposure and whether or not it may require a further recapitalisation, possibly by the Portuguese government. European markets are stable at the open and a regulatory filing overnight suggesting that BES has a capital buffer of €2.1bn against a total group exposure of €1.2bn may ease some concerns, but given the opaqueness of the group structure and continued talk over restructure markets are likely to remain nervous into the weekend."
Key Quotes
"Memories of the euro crisis we revived again yesterday, with European equity markets tumbling and Portuguese 10yr bond yields rising 21bp over concerns about the financial health of Banco Espirito Santo (BES), Portugal’s largest bank. The situation stems from what auditors have labelled ‘material irregularities’ at BES’ parent holding company Espirito Santo International (ESI) and its subsequent delayed debt payment and talk of a debt restructure."
"Due to a labyrinthine cross shareholding structure market concern is over BES’ potential exposure and whether or not it may require a further recapitalisation, possibly by the Portuguese government. European markets are stable at the open and a regulatory filing overnight suggesting that BES has a capital buffer of €2.1bn against a total group exposure of €1.2bn may ease some concerns, but given the opaqueness of the group structure and continued talk over restructure markets are likely to remain nervous into the weekend."