Government sets up new national development bank

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A new Government-owned national development bank is to be created by merging IFD (Instituição Financeira de Desenvolvimento) and PME Investment into SPGM.

It will mean the creation of a new bank in a project called the Banco Português de Fomento that had been announced in February, with a capital injection and the removal of existing private capital.
The development bank “will make a difference in this phase of the reopening of the economy” says the Minister of the Economy Pedro Siza Vieira adding that the new bank “will have to move fast” and promised “fresh announcements in the coming weeks.”
The development bank will see a capital boost of €255 million. Up until now, IFD which acts as a national development bank, has €100 million in capital.
The new bank will result from the merger of three entities which will enhance its position not only in terms of the capital from each, but also in State investments and participations that the State has in venture capital company Portugal Ventures.
It will also include the participation that the Portuguese tourist board Turismo de Portugal has in TF Turismo de Fundos and the incorporation of reserves which correspond to the profits of SPGM.
All told, the amounts to some €255 million of share capital. The changes are still awaiting the green light from the European Commission with which Portugal’s minister of the Economy is in discussions, as well as from the Bank of Portugal.
The Portuguese government-owned companies investment entity IAPMEI will hold 47% of the bank’s capital, the Director General of Treasury and Finances will hold 40.88%, Turismo de Portugal will hold 8.1% and AICEP, the Government’s overseas investment agency will hold the remaining 4.02% in the new development bank.