BCP vulnerable to take-over bids

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Portugal’s commercial bank BCP has admitted this week that it is vulnerable to Public Acquisition Offers (PAO).

The bank, led by Miguel Maya says that a hostile take-over bid could happen taking into account the scenario of consolidations and mergers currently existing in the European banking sector.

“If such a take-over bid were to occur, it could force a change in the bank’s current business strategy, its main businesses, operations and resources which could have a substantially adverse effect on its activity, financial situation and results” states the bank in an official document dated 21 September.

BCP had first admitted that a hostile bid was on the cards at the beginning of 2017. At the time several factors were contributing to such a scenario with the bank “vulnerable to such take-overs as a result of a deterioration in its economic and financial indicators and a context of consolidation in the Portuguese banking market.

This week the ratings agency Standard & Poor’s improved its financial rating for the bank from BB- to BB (two levels before being clear of junk status). Most of Portugal’s other banks did not change status.

The agency said that its decision was down to “an improved operational environment in the Portuguese banking sector” while analysts have pointed out that the bank had reduced its exposure to problem assets by €2.7Bn between 2016 and July 2018.

They also point out that the bank’s domestic activity has returned to profit since the last quarter of 2017, putting an end to a cycle of four years of losses.