The shares gained as much as 5.3 percent to 10 euro cents in Lisbon trading, the highest level in three weeks. They climbed 2.1 percent to 9.7 euro cents at 9:26 a.m., giving the firm a market value of 1.9 billion euros ($2.5 billion).
The sale of Millenium Bank Greece represents a “relevant improvement in the group’s risk profile, as it reduces significantly the bank’s exposure to one of the most problematic economies in its business portfolio,” Carlos Peixoto, an analyst at Banco BPI (BPI) in Porto, said in an e-mailed report to clients today. It is also a “first step toward increasing visibility regarding BCP’s capacity to redeem” state aid by June 2017, he said.
Banco Comercial will sell Millenium Bank Greece for 1 million euros and also agreed to invest 400 million euros in Piraeus’s forthcoming capital increase as a condition of the sale, leading to a minority stake in Piraeus, Millenium said in an e-mailed statement today. The transactions are expected to be completed in the second quarter, it said. Banco Comercial can’t sell its minority stake for six months.
Banco Comercial has booked a provision of 427 million euros for the potential losses in Millenium, according to the statement. The sale will allow Banco Comercial to “deconsolidate about 4 billion euros in risk weighted assets” as of December, it said.
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