Banco Bradesco SA (BBDC4), the Brazilian lender that owns 3.9 percent of Banco Espirito Santo SA, doesn’t plan to contribute to the Portuguese bank’s capital raise, according to a person familiar with the matter who asked not to be identified because he wasn’t authorized to speak publicly.
Bradesco will assess the Espirito Santo’s capitalization “at the right moment,” Chief Executive Officer Luiz Carlos Trabuco Cappi said today after his Osasco, Brazil-based bank reported second-quarter results. “There isn’t any capitalization being requested at this moment. What exists is a discussion.”
The Bank of Portugal required Espirito Santo to raise capital after the lender set aside 4.25 billion euros ($5.7 billion) in the first half of the year, mostly to cover souring loans to other members of the Espirito Santo Group. That cut the bank’s common equity Tier 1 ratio to 5 percent, less than the 7 percent regulatory minimum, according to a statement late yesterday as the company posted a 3.6 billion-euro first-half net loss.
Espirito Santo shares plunged 42 percent today to 20.1 euro cents in Lisbon, the biggest decline on record, valuing the bank at 1.13 billion euros.