Essential Business

State considering investing in four banks

 In Banks, News

The Portuguese State could take a direct shareholding of 2% in Novo Banco next year and become a shareholder in three other banks.

Bison Bank, Haitong Bank – both owned by Chinese investors — and Montepio are the other three banks in which the State may become a shareholder under a special regime applicable on assets in cases of deferred taxes.
In other words, because taxes are owed and the banks are behind in payments, the State will take a shareholding.
According to Expresso, in the Case of Novo Banco, the Resolution Fund – which is in the public sphere — has a 25% stake in the bank’s capital since 75% of the bank was sold to the US equity fund Lone Star in 2017.
According to Expresso, the State will begin to have a share of around 2% in Novo Banco but this will climb in the coming years until it reaches 15%.
The regime regarding deferred tax assets was introduced in 2014 which enables banks to obtain “discounts” on taxes by basically offsetting taxes payable in exchange for the State having a shareholding in the bank. This may happen if the bank has considerable losses.
Bank shareholders get the option to buy a stake attributable to the State for a three year period counting from the date of confirmation by the tax authorities that deferred tax assets have been converted into credits in favour of the State.
In other words the State is buying the debt of these three banks represented by and resulting from deferred or overdue taxes in the form of a shareholding to stand as a guarantee for a period in which these taxes are paid.
The State currently owns Caixa Geral de Depósitos and Efisa which had belonged to BPN and which is now defunct.


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