Portugal’s public debt has risen to €240 billion in June, an eye-watering sum for a country of just 10.5 million people.
The Bank of Portugal’s statistical bulletin issued today reported that, "at the end of the first half of 2016, the public debt stood at €240 billion, up €2.4 billion compared to May."
The June change "mainly reflects positive net issuance of securities of €2.0 billion," said the central bank, referring to the treasury's unerring ability to borrow more and more to fund government spending.
As for the banking sector, shares in Banco Comercial Português burst into life today as China's Fosun made a surprise offer to take a 17% stake. BCP’ share price jumped 7% percent in early trading before falling back to a 2% rise on the day.
BCP's bank's board announced the proposal from Fosun Industrial Holdings Limited on Saturday, saying the bid had "many positive aspects" and would be looked at carefully over the next few days.
The board statement added that Fosun is considering buying up to 30% of BCP whose shares ended trading today at €0.02, down from over €3 a share in 2008. Fosun already owns Portugal's biggest insurance company, Caixa Seguros.
BCP, along with other of Portugal’s formerly glorious banks, has struggled to make a profit in recent years due to bad loans and curent low interest rates.
BCP has assets of more than €75 billion but recorded losses of €197 million in the first half of this year, down from a profit of 241 million in the same period of 2015.
Bombed out Novo Banco reported further losses today, €362 million in six months trading under the leadership of Eduardo Stock da Cunha who now has returned to the relative security of Lloyds bank in London. The Portuguese ‘bridge bank’ born from the collapse of BES is lined up for sale with the four accepted bidders expected to have gone in low.
Carlos Costa, the Bank of Portugal governor whose ‘resolution’ for BES was in part, the creation of Novo Banco, desperately needs bids of €4.9 billion or above for Novo Banco to vindicate his August 2014 'good bank:bad bank' move.
Costa may have been thrown a lifeline by China’s Haitong Bank which has proposed an alternative solution to the looming Novo Banco problem.
Haitong, now led by José Maria Ricciardi, formely of Grupo Espírito Santo, Bank Espírito Santo International Limited, and Espírito Santo Sociedade de Investimentos, reckons the Novo Banco sale process will bomb and already has expressed interest in leading a group of investors to control 30% of the bank in exchange for €1.5 billion - €2 billion with the State controlling the remaining shares.
Sérgio Monteiro, former Secretary of State for Infrastructure and now the €25,000-a-month salesman for Novo Banco, has asked Ricciardi to submit a formal proposal.
Espírito Santo ‘clan’ member Riccardi said that a full proposal will take some time to arrange and the two have arranged to meet up in September if the Novo Banco sale process ends in tears.
