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Espirito Santo Drops to Record as Profit Declines: Lisbon Mover

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May 16 (Bloomberg) -- Banco Espirito Santo SA, Portugal’s biggest publicly traded bank, dropped to a record close after reporting lower quarterly profit.

The stock fell 4.8 euro cents, or 8.3 percent, to 53.2 cents, the largest drop in a month and the lowest close since 1993.

Espirito Santo, which is based in Lisbon, said yesterday after the close of trading that first-quarter net income declined 84 percent to 11.6 million euros ($15 million).

“These earnings consolidate the trend of accentuated deterioration of the quality of the bank’s assets, in line with the sector in Portugal, and with the level of provisioning remaining high,” Andre Rodrigues, an analyst at Caixa-Banco de Investimento SA, said today in a research note. Rodrigues has a buy recommendation on the stock.

Espirito Santo last week completed a 1 billion-euro capital increase. That share sale will increase the bank’s core Tier 1 ratio, a measure of financial strength, to 10.75 percent from 9.21 percent, the lender said on April 11.

To contact the reporter on this story: Joao Lima in Lisbon at jlima1@bloomberg.net

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net

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