Millennium BCP hit a new low last week with its shares continuing a race to the bottom.
This lowest ever valuation for the bank was reached and the shares suspended after they dropped 10% last Wednesday, down 50% since the beginning of the year and 25% down in the last week on poor news and even worse projections.
The high street bank now has a market capitalisation of just €1.42 billion.
The sharp drop in share price last Wednesday prompted the stock market regulator to prohibit the selling of shares for the subsequent session to allow the dust to settle.
There are concerns that Millennium BCP will have to re-capitalise, especially if it seriously wants to be considered as a buyer for Novo Banco.
The president of Millennium BCP, Nuno Amado, said the bank is going the right way - despite giving every appearance of going down the tubes:
"We have presented €47 million in profit in the quarter and we will not change this course of consistent and recurring profitability," said Amado from his parallel planet.
Possible bidders for Novo Banco have confirmed interest with BPI and Santander wanting to buy the 'bridge bank' that rose from the ashes of Banco Espírito Santo in 2014.
There are at least three banks with a presence in Portugal that are interested in buying Novo Banco and consequently have requested access to confidential information about the institution led by Eduardo Stock da Cunha, namely – Millennium BCP, BPI and Santander.
Despite a road show to the US and London, the €30,000 a month project leader, the former Secretary of State for Transport and Communications, Sérgio Monteiro, has come up with nothing; no Chinese buyers, no US venture capital company and certainly nothing that will lead to a knock-out bid to recoup the billions loaned.
The interested banks have until the end of June to decide whether to go to the next stage, as long as the team set up to sell Novo Banco is still interested in selling the bank rather than offering it in a stock market flotation.
Stock da Cunha goes back to his job in London at the end of August by which time Novo Banco should have a new owner.
Whether the Resolution Fund and the taxpayer will get back the €4.9 billion owned is still at long odds and a debt for equity swap may be the best way forward to save the Bank of Portugal’s governor, Carlos Costa, from explaining yet another huge loss in the sector that in theory he oversees.
