Banco BPI says no longer holds pricey CoCo bonds, capital strong

LISBON, June 25 Wed Jun 25, 2014 9:48am EDT

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LISBON, June 25 (Reuters) - Portugal's third-largest listed bank Banco BPI said it had repaid the remaining 420 million euros ($571 million) in state loans taken at the height of the country's debt crisis in 2012, and had achieved a capital ratio above that required by regulators.

Since last year, BPI has paid back the total 1.5 billion euros in loans it held in so-called contingent convertible (CoCo) bonds, which carry high interest rates and have weighed heavily on its earnings. It requested the central bank's permission to reimburse the last batch in April.

BPI said in a statement on Wednesday that after the repayments it had a capital excess of nearly 740 million euros compared with European Central Bank requirements, with a common equity Tier 1 capital ratio of 12.1 pct, well above the required minimum of 8 percent.

Portugal's banks took the loans as part of a bailout by the European Union and International Monetary Fund that ended last month. As the economy started to recover last year, the banks began repaying the emergency loans to the state.

Millennium bcp, Portugal's second-largest listed bank, on Tuesday announced a planned 2.25 billion euros share issue, saying it would use the proceeds to repay 1.85 billion euros in CoCos, which led to a surge in its shares.

BPI shares rose 4 percent, trailing BCP's 13 percent rise and Banco Espirito Santo's 6 percent gain. BES shares are recovering from sharp recent losses due to planned top management changes following the loss of control by the founding family in BES' own share sale. ($1 = 0.7355 Euros) (Reporting by Andrei Khalip; Editing by David Holmes)

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