(In entry for May 27, corrects ESFG's stake to 25 percent from
20 percent; in last paragraph removes reference to Nomura; also
changes headline tag to timeline from factbox)
July 14 Shares in Portugal's largest listed
lender Banco Espirito Santo have lost more than half
their value in the last month, triggering a crisis that hit
Portugal's sovereign borrowing costs and the debt issuance plans
of other southern European companies. Here is the chain of
events leading up to this:
* JUL 26: BES reports worse than expected losses for the
first half of the year and says it is considering buying Swiss
* NOV 21: BES is first Portuguese bank to issue subordinated
debt in four years. The 750 million euros sale is billed as sign
of confidence in Portugal's recovery.
* DEC 12: Wall Street Journal reports that Espirito Santo
International (ESI), an Espirito Santo family company, sold more
than 6 billion euros of debt to one of its own investment funds
in a 21 month period from 2011. Newspaper also says that
Espirito Santo Financial Group 2012 accounts value its stake in
BES at more than four times its 365 million euros market value.
* END 2013: Angola government gives a guarantee for 4.2
billion euros of lending (or 70 percent of the total loan book)
of BES Angola after the Bank of Portugal became concerned about
the exposures. Development is not made public.2014
* EARLY 2014: Bank of Portugal hires auditors KPMG to carry
out a ESI "a special purpose limited review" into ESI's third
quarter and full year results for 2013. The development is not
* FEB 13: BES posts slightly higher than expected 2013 loss
and says it will not rule out raising cash.
* MAY 15: BES announces 1.045 billion euros capital raise by
offering cheap stock to existing shareholders. ESFG and Credit
Agricole announce that they are dissolving BESPAR, a holding
company that owned their joint 47 percent stake in BES. ESFG is
left with 27.36 percent and Credit Agricole with 20.12 percent.
* MAY 21: BES tells investors that independent auditors
found "irregularities" at ESI that left the company in a
"serious financial situation". Bank warns it is facing
"reputational risk" over selling ESI bonds to customers. Shares
fall sharply. here
* MAY 22: BES CEO Ricardo Espirito Santo Salgado tells
Portuguese newspaper that the bank knew nothing of ESI's
* MAY 27: ESFG and Credit Agricole say their stakes in BES
will fall after the capital raise because they will not take up
all the cheap shares they have been allocated. ESFG's stake will
reduce to 25 percent and Credit Agricole's to 15 percent.
* MAY 29: ESFG reveals further details of ESI's special
audit findings, including that ESI had omitted debts from its
accounts, overvalued assets and maintained inadequate records.
It describes ESI as having an "extremely negative financial
situation" and says the company will improve corporate
governance and reorganize. here
* JUN 11: BES completes 1.045 billion euros capital raise.
CEO Salgado tells Reuters his family has lost control of the
* MID JUN: Portuguese media reveal problems at BES's Angolan
subsidiary, including the fact that the bank's local team does
not know the identity of the underlying borrowers for most of
its loan book.
* JUN 19: Espirito Santo family members, including BES CEO
Salgado, agree to give up their leadership of the bank and step
down from its board after a meeting with the Bank of Portugal.
* JUN 20: Salgado's departure is announced, ESFG says it
will propose BES's current chief financial officer, Amilcar
Morais Pires, as Salgado's successor. here
* JUN 27: Reuters reveals that Luxembourg's justice
authorities have launched a probe into the Espirito Santos'
family holding companies. ESFG shares fall 18.5 percent, BES's
11 percent. Portugal's finance minister says situation at the
bank is no threat to financial stability.
* JUN 30: BES holds conference call to try to reassure
investors on situation with family companies and Angola. More
than 800 dial in but the call, which lasts just eight minutes,
triggers a sharp sale in the stock. On it, BES revealed it had
about 1 billion euros of exposure to Rioforte and ESI and gave
details of the Angolan state guarantee.
* JUL 1: Regulators impose short-selling ban on BES in bid
to arrest BES's share price slide. Shares fall 13 percent and
then recover. Short selling in ESFG also suspended.
* JUL 3: ESFG reveals a billion euros rise in its exposure
to Grupo Espirito Santo over the first six months of the year.
ESFG now has an exposure of 2.35 billion euros. It rose because
ESFG stepped in to ensure repayment of GES bonds sold to BES
client. ESFG also says it has 823 million euros in borrowings
from BES and 830 million euros of unsecured external borrowings.
* JUL 5: ESFG says it will now propose a respected
economist, Vitor Bento, as BES's next CEO and another outsider,
Joao Moreira Rato, as chief financial officer. here
* JUL 9: Swiss-based Banque Privee Espirito Santo, owned by
the wider Espirito Santo Group, admits that ESI missed repayment
dates on some debt sold to its clients. Sources say ESI is
considering ways to restructure its debt
* JUL 10: ESFG asks for its shares and bonds to be
suspended, so it can assess the financial impact of its exposure
to its largest shareholder ESI, which ESFG describes as having
"material difficulties". here
BES shares suspended after falling as much as 19 percent in
* JUL 10: BES issues statement insisting it can withstand
any losses on lending to the Espirito Santo companies and has
2.1 billion euros in excess capital. Also gives detailed
breakdown of 1.15 billion euros of lending to the family
companies, but bank admits it cannot predict how much it will
lose on the loans until the group presents a restructuring plan.
* JUL 11: BES shares resume trading and fall 5.5 percent to
lowest in almost two years. Portugal's prime minister joins the
chorus trying to soothe investors
* JUL 13: Bank of Portugal tells BES not to wait for July 31
shareholders meeting to install new management.
* JUL 14: ESFG announces that it has sold 4.99 percent of
BES to repay funds. Shares in BES fall another 10 percent in
morning trading, hitting their lowest level in almost two years.
(Reporting by Laura Noonan; Editing by Sophie Walker and David