You are here

Clarification on the deliberation of the Board of Directors of Banco de Portugal of 14 August 2014

Commercial treatment of the retail customers of Banco Espírito Santo, S.A. who are holders of debt under the form of unsubordinated bonds previously issued by Banco Espírito Santo, S.A., or who have underwritten debt securities issued by entities of Grupo Espírito Santo.

 
1. Unsubordinated bonds that have been issued by Banco Espírito Santo, S.A. will be repaid by Novo Banco, S.A. at their maturity date, as customers’ credit claims on those bonds have been transferred to Novo Banco, S.A.

Under the terms of the deliberation approved today by the Board of Directors of Banco de Portugal, any early repurchase operation of those bonds (before their maturity date) must fall within the scope of the commercial management of costumers by Novo Banco, S.A., under terms to be defined by the respective Board of Directors.

Such terms must meet the recommendations already issued by Banco de Portugal and, in particular, must ensure a positive or neutral impact at the level of results, capital ratios and liquidity position of Novo Banco, S.A.

2. Subordinated bonds or other securities representing subordinated debt issued by Banco Espírito Santo, S.A. have not been transferred to Novo Banco, S.A.

3. All bonds and other securities representing debt not issued by Banco Espírito Santo, S.A. shall be repaid by the respective issuers, which are the debtors of the claims on such securities or bonds.

Under the terms of the abovementioned deliberation of the Board of Directors of Banco de Portugal, any proposals for the treatment of retail customers holding such instruments, of which Novo Banco, S.A. is not a debtor, and which are deemed relevant to maintain customers’ confidence relationships, shall hinge on conditions to be defined by the Board of Directors of Novo Banco, S.A.

The above conditions must meet the recommendations already issued by Banco de Portugal and, in particular, must ensure a positive or neutral impact at the level of results, capital ratios and liquidity position of Novo Banco, S.A.

4. As regards points 1 and 3, it should be mentioned that:

  • Novo Banco, S.A. must develop and implement control procedures ensuring compliance with the conditions to be established, as well as its immediate demonstration in order to be verified by the external auditor, the Board of Auditors of Novo Banco, S.A. and the competent authorities.
  • Any commercial proposals to be defined by the Board of Directors of Novo Banco, S.A. shall not apply to BES-related entities (such as shareholders whose shareholdings exceed 2% and Board Members), whose claims, being subordinated debt, have not been transferred to Novo Banco, S.A.

Lisbon, 14 August 2014