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UPDATE 1-Portugal's BES posts 2013 loss of 518 mln euros
February 13, 2014 / 7:07 PM / 4 years ago

UPDATE 1-Portugal's BES posts 2013 loss of 518 mln euros

(Updates with more details, comment)

LISBON, Feb 13 (Reuters) - Banco Espirito Santo, Portugal’s second-largest listed bank by assets, posted a bigger-than-expected net loss of 518 million euros ($707.90 million) in 2013 on the back of large provisions and said it would not rule out a capital increase.

The bank said provisions rose 18.6 percent to 1.422 billion euros due to the recession in the Portuguese economy and deleveraging. In 2012 BES posted a net profit of 96 million euros.

Net interest income - the difference between interest charged on loans and interest paid on deposits - fell 12.4 percent to 1.034 billion euros.

Analysts surveyed by Reuters had predicted, on average, a net loss of 497 million euros and net interest income of 1.05 billion euros.

Chief executive Ricardo Espirito Santo Salgado said even if the bank has solid capital he would not rule out a capital increase.

“If a capital increase becomes necessary, there is available capital in international markets without having to go to the state,” he told journalists.

BES’ operation in Portugal posted a loss of 540 million euros while the bank’s overseas operations had a profit of 22 million euros.

Portugal emerged from a deep recession in the second quarter of 2013, but banks are still struggling in the short term with the effects of the worst downturn since the 1970s in the bailed-out country.

The bank said its Core Tier 1 capital ratio stood at 10.6 percent, above 10 percent required by the central bank.

Shares in Banco Espirito Santo had closed 1.9 percent higher on Thursday before the results were announced, while the broader market in Lisbon advanced 0.6 percent.

$1 = 0.7317 euros Reporting By Sergio Goncalves and Axel Bugge; Editing by Elaine Hardcastle

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