The Bank of Canada will only give the Private Bank 45 million euros of the program of State guarantees for financing in international financial markets, accounting for 0.22% share of the bank has in the Portuguese market. The needs of Private Bank are much higher than that and now the seat of John tenant is in a situation of financial imbalance resulted in the reduction of its capital. Vítor CONSTANCIO, said yesterday in an interview on RTP, which had been all day working on a solution to the Private Bank, but that could not impose on private banks that helped the BPP. The Governor of the Bank of Portugal pointed the finger to the downward revision of Moody's, given the November 13, and that led to the current situation of the BPP. The Economic Daily knows that the private banks (CGD, BES, BPI, and BCP) refused to give any kind of aid Private Bank. Not only will not buy the bank, nor any of the assets, but are not available to provide liquidity as part of the refinancing needs of the portfolios of assets. The Banif also revealed not to have interest in buying the Private Bank.
Vehicles of the BPP invested in shares that have suffered major devaluations. "The Private Financial raised, with a group of investors, 100 million euros in capital. Later, [...] was negotiated with the bank JP Morgan financing via an 'equity swap' of up to 200 million. With these resources, could buy 2.4% of the capital of BCP, "reveals the report and accounts of the BPP. This' equity swap 'has been converted into a credit agreement with pledge of shares. The estimated an average price of 3 euros per share BCP in July 2007, the BPP will have invested around 338 million euros, a stake in BCP which now is worth 78 million. The debt to JP Morgan wins the interest unaffordable for the BPP and the solution is the implementation of safeguards, if there is no equity to strengthen.
The BPP was still affected directly in its own portfolio that invested in shares. The shares of the BPP in vehicles are less than 20% to avoid having to reflect the bank's capital ratio of the potential write-off. That is why Moody's, the November 13, issued a note which warns that the BPP have a high concentration of credit and a capital ratio of tight and that the Tier 1 ratio of 15.4% in June "Did not reflect the risk of the institution." The BPP was yesterday met for three hours with Victor Constantius to request that the guarantees were at least 500 million euros, to deal with the financial imbalance.
John tenant and shareholders Francisco Pinto Balsemão (with 6%) and Saviotti (with almost 6%) have in recent days, tried to call for help from some of the biggest private banks, to try to save the BPP, knew the Economic Daily . But none was available to respond to the call. Meanwhile, Stefano Saviotti said to be available to accompany a hypothetical bank's capital increase which will be discussed in future AG.
Bankruptcy in the "hands" of the Bank of Portugal
According to Pedro Ferreira Malachi, a partner of the Banking Uría Menéndez, "the Bank of Portugal, as supervisor, may require that banks take necessary steps to remedy the situations of breaches of the rules governing their activities." Being precise measures of sanitation, these "must protect the interests of depositors, investors and other creditors, and to safeguard the normal operation of the money market, financial or foreign exchange," continued the lawyer.
In practice, the Bank of Portugal has the power and duty to appoint an administration that takes account of the management of company assets of the bank. This administration has expanded the powers to administer under the general system of credit institutions, and its main task to normalize the functioning of the bank in question, defending the principle of trust.
However, another expert contacted by the Economic Daily alert for the overall situation of economic crisis and that with the recent nationalization of the Portuguese Business Bank by the Government, nothing is certain.
Vehicles of the BPP invested in shares that have suffered major devaluations. "The Private Financial raised, with a group of investors, 100 million euros in capital. Later, [...] was negotiated with the bank JP Morgan financing via an 'equity swap' of up to 200 million. With these resources, could buy 2.4% of the capital of BCP, "reveals the report and accounts of the BPP. This' equity swap 'has been converted into a credit agreement with pledge of shares. The estimated an average price of 3 euros per share BCP in July 2007, the BPP will have invested around 338 million euros, a stake in BCP which now is worth 78 million. The debt to JP Morgan wins the interest unaffordable for the BPP and the solution is the implementation of safeguards, if there is no equity to strengthen.
The BPP was still affected directly in its own portfolio that invested in shares. The shares of the BPP in vehicles are less than 20% to avoid having to reflect the bank's capital ratio of the potential write-off. That is why Moody's, the November 13, issued a note which warns that the BPP have a high concentration of credit and a capital ratio of tight and that the Tier 1 ratio of 15.4% in June "Did not reflect the risk of the institution." The BPP was yesterday met for three hours with Victor Constantius to request that the guarantees were at least 500 million euros, to deal with the financial imbalance.
John tenant and shareholders Francisco Pinto Balsemão (with 6%) and Saviotti (with almost 6%) have in recent days, tried to call for help from some of the biggest private banks, to try to save the BPP, knew the Economic Daily . But none was available to respond to the call. Meanwhile, Stefano Saviotti said to be available to accompany a hypothetical bank's capital increase which will be discussed in future AG.
Bankruptcy in the "hands" of the Bank of Portugal
According to Pedro Ferreira Malachi, a partner of the Banking Uría Menéndez, "the Bank of Portugal, as supervisor, may require that banks take necessary steps to remedy the situations of breaches of the rules governing their activities." Being precise measures of sanitation, these "must protect the interests of depositors, investors and other creditors, and to safeguard the normal operation of the money market, financial or foreign exchange," continued the lawyer.
In practice, the Bank of Portugal has the power and duty to appoint an administration that takes account of the management of company assets of the bank. This administration has expanded the powers to administer under the general system of credit institutions, and its main task to normalize the functioning of the bank in question, defending the principle of trust.
However, another expert contacted by the Economic Daily alert for the overall situation of economic crisis and that with the recent nationalization of the Portuguese Business Bank by the Government, nothing is certain.
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