Mergers and acquisitions shakeup Portugal’s banking sector

Portugal’s banking sector has been shaken up in recent months by a wave of mergers and acquisitions.

Seeming to follow the advice of the European Central Bank and European Commission which has argued since the end of the crisis for Portuguese banks to preserve greater levels of Tier I Capital and for less smaller banks in the market, the banks which are fewer than before 2011 are attracting national and international giants according to the online news site ECO.

CTT
Since its major restructuring, Portugal’s postal service CTT has invested in the financial sector to provide more leverage to its Banco CTT (led by Luís Pereira Coutinho) which has bought 321 Crédit for €100 million. The operation has been given the go-ahead by the authorities and will be concluded this month.
The acquisition of 321 Crédit should enable CTT to diversify its portfolio of Banco CTT products, “with a profitable consumer credit business,” and improve the bank’s transformation ratio from 20% to 60%.

Primus
The Australian Pepper Group is awaiting the green light from the Portuguese authorities to purchase Portuguese bank Banco Primus.
Primus, which specialises in consumer credit, is subject to a €65 million offer but has been waiting for the Bank of Portugal to give the go-ahead for two years.
The Portuguese bank is currently owned by the French Crédit Foncier and the various parties have been exchanging information and documents pertaining to the business.
“It is expected things will move forward by the 31 July” says Banco Primus CEO, Hugo Carvalho Silva.
The Pepper Group is currently held by the KKR fund and is currently listed on the Australian stock market at around €450 million. In Europe it is present in the UK, Ireland and Spain. If the acquisition goes ahead, the Primus Bank could be renamed Pepper Bank.

BPG
The Banco Português de Gestão (BPG) which is 90% held by the Oriente Foundation, may soon be sold to Efisa (Bahrain IIBG Holdings).
Rumours abounded in Lisbon that the bank had actually been sold last week, but the institution led by Carlos Monjardino stated that, “No sale has been confirmed”.
BPG closed 2018 with losses of €14 million caused by a fall in its financial margins (-15%) and an increase in operational costs (+21%). A liquidity injection of €4.7 million to cover non-performing loans also reflected on the losses.

BNI Europa
The Angolan Banco de Negócios International (BNI) is preparing to sell its majority share in the Portuguese bank BNI Europa by June.
The share has been snapped up by the Chinese buyer KWG which will invest €15 million in the national bank in Portugal.
According to Expresso, the institution called a General Board Meeting on 17 June to approve a capital raise of €15 million and the cancelling of shareholder preferential voting rights. This means that the new Chinese shareholder will have to inject the capital into the bank after the regulator gives the green light.
BNI Europa, led by Pedro Pinto Coelho, recorded losses of €6.5 million in 2018 because of the need to cover impairment losses by credit to €10.6 million.

Banco Carregosa
Amorim Projects holds 8% of Banco Carregosa led by Maria Cândida da Rocha Silva but intend to sell its share according to Jornal Económico.
A source at the bank said at the time that the decision to sell the share arose after the death of Américo Amorim.
Among the other main shareholders which have an over 5% share, is the Porto-based bank’s CEO Maria Cândida da Rocha e Silva, Jorge Freitas Gonçalves (Vice Chair) and António Pinto Marante (Director) in addition to Amorim Projetos.