EOS: Espirito Santo Fin: ON-SITE INSPECTIONS PROGRAMME ON EXPOSURE TO THE
CONSTRUCTION AND REAL ESTATE SECTORS
UK Regulatory Announcement
Registered Office: 21/25 Allée Scheffer, L- 2520 Luxembourg
R.C.S. Luxembourg B 22.232
ESPÍRITO SANTO FINANCIAL GROUP ANNOUNCES RESULTS OF THE ON-SITE INSPECTIONS
PROGRAMME ON EXPOSURE TO THE CONSTRUCTION AND REAL ESTATE SECTORS.
Luxembourg/Portugal – 4 December 2012 - Espírito Santo Financial Group S.A.
(‘ESFG’ or ‘Group ESFG’) (NYSE Euronext Lisbon: ESF; Bloomberg: ESF PL;
Reuters: ESF LS) today announces the results of the inspections on exposure to
the Construction and Real Estate sectors.
The On-Site Inspections Programme (‘OIP’), which was concluded on 29 November
2012, involved the evaluation of exposure to the Portuguese and Spanish
construction and real estate sectors as of 30 June 2012.
The OIP involved the 8 largest banking groups in Portugal, including Espírito
Santo Financial Group S.A. (‘Group ESFG’), and had the objective of evaluating
the adequacy for impairments on exposure to the aforementioned sectors, as of
30 June 2012 (the reference date), based on conservative evaluation criteria.
At Group ESFG it was concluded that there was a need to further strengthen
provisions for impairments by EUR 205.0 million, which represents
approximately 1.9% of evaluated exposure.
Of the EUR 205.0 million, EUR 127 million relate to information and events
that were subsequent to the reference date, including more recent insolvencies
and bankruptcies and the revaluation of collateral. This has been illustrated
on the left hand side of the chart (Fig I.)
As of 30 September 2012 Group ESFG had succeeded in strengthening its
provisions for impairments and thus reduced its need for further provisioning
from EUR 205.0 million to EUR 98.0 million. The remaining requirement will be
concluded by 31 December 2012, as illustrated on the right hand side of the
chart (Fig I.).
Taking into account the expected impairment charges planned by Group ESFG for
the 4th quarter 2012, the impact of the results from the OIP on the Group’s
Core Tier 1, as of 31 December 2012, will be negligible. The reinforcement of
provisions will not affect Group ESFG’s ability to meet the minimum regulatory
requirement of 10.0% by year end.
Additionally, the OIP requirement for additional provisioning does not
materially alter the burden of provisioning for impairments on credit planned
by Group ESFG for the financial year ending 31 December 2012.
Espírito Santo Financial Group S.A.
Filipe Worsdell, +44 203 429 2100
Faisal Kanth, +44 207 614 2900
The Espírito Santo Financial Group provides, through its subsidiaries, a
global and diversified range of financial services to its clients including
Commercial banking, Insurance, Investment banking, Stockbrokerage and Asset
management in Portugal and internationally. For additional information on
Espírito Santo Financial Group, its subsidiaries, operations and results,
please visit the Company’s website on www.esfg.com
Espirito Santo Fin
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