Portugal Banking

About Portugal Banking

Banco Espirito Santo, Portugals largest bank by market value, collapsed in July 2014 after revelations about financial irregularities at its parent company, Espirito Santo International. The Bank of Portugal resolved BES by creating a good bank, Novo Banco, and transferring toxic assets to a bad bank. Novo Banco received 4.9 billion in state aid. The resolution was controversial. Lone Star Funds acquired 75 percent of Novo Banco for 1 billion in 2017. Portugal had entered a Troika program in 2011, receiving 78 billion in assistance. Portugal exited the program in 2014. The BES collapse demonstrated that banking problems persisted in peripheral eurozone countries years after the initial crisis. The case highlighted governance failures at family controlled European banks.