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Bank of Portugal speeds up management changes at BES
July 13, 2014 / 8:11 PM / in 3 years

Bank of Portugal speeds up management changes at BES

LISBON, July 13 (Reuters) - The Bank of Portugal accelerated management changes at Banco Espirito Santo on Sunday in a further sign that regulators want the bank to be distanced from the financial woes of the bank’s founding family.

The Bank of Portugal said in a statement that it had ordered BES, Portugal’s largest listed bank by assets, to hold a meeting of its advisory board to immediately put in place new executives who were originally supposed to take over at the end of July.

BES has been hit in recent weeks by fears that a “serious financial condition” at one of its founding family’s holding company’s - Espirito Santo International - could undermine its capital base.

The worries over BES sent shockwaves through financial markets beyond Portugal last week. The bank has said it has enough capital to meet any potential capital shortfalls resulting from its exposure to Espirito Santo family companies.

The Bank of Portugal said it wanted the management changes to take place “following the resignations presented by members of the management board of BES”.

The Espirito Santo family patriarch, Ricardo Espirito Santo Salgado, announced his resignation as chief executive of BES last month. But his departure, along with other members of the family on the bank’s board, was only due to take effect after a meeting of the bank’s shareholders on July 31.

The head of BES’s investment banking unit, Jose Maria Ricciardi, said on Sunday the change in BES’s management needed to take place as soon as possible.

“I think it’s indispensable for the confidence of clients, staff and the general public that the executive commission of BES be substituted as soon as possible by the new team that is supported by the main shareholders and the Bank of Portugal,” he said in a statement sent to Reuters.

“This decision is part of the position that I have taken for more than a year, of denouncing practices internally and to regulators with the aim of changing governance at BES and at the Espirito Santo Group,” he said.

The Espirito Santo family has named respected economist Vitor Bento to be the new chief executive of the bank and Joao de Almada Moreira Rato, who heads Portugal’s IGCP debt agency, to be the chief financial officer.

The Bank of Portugal said the new executives still needed to be confirmed at the July 31 shareholders’ meeting.

Reporting By Axel Bugge; Editing by Kevin Liffey

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