Banco Espírito Santo’s banking license has been revoked by the European Central Bank, enabling one of Portugal’s highest profile business failures to be liquidated - with massive losses.
With this license withdrawn, the Bank of Portugal will now "require, under the law, the beginning of the judicial liquidation of BES."
The Bank of Portugal’s statement finishes with a ‘thank you’ from its governor Carlos Costa to the Board of Directors of BES, led by Luís Máximo dos Santos - who conveniently has now joined the Bank of Portugal.
The note refers to the BES Board’s "great dedication and competence demonstrated in performance of its duties, under particularly complex conditions."
The old BES holds the toxic assets from the resolution process when in 2014, BES was split into 'good bank' Novo Banco and ‘bad bank’ BES.
BES closed 2015 with losses of €2.6 billion, most of these due to a decision in December 2015 to reassign €2.2 billion in senior debt from Novo Banco to ‘bad bank’ BES, much to the anger of those institutions which had been categorically assured that their investments would stay with Novo Banco and thus have a good chance of being repaid.
The end of BES’ banking license marks another milestone towards the final disgrace of Ricardo Salgado whose control of BES and the Espírito Santo empire led to their collapse and his subsequent arrest on multiple charges including money laundering and criminal mis-management.
