LISBON, Aug 12 (Reuters) - The healthy bank carved out of Banco Espirito Santo will take on the bank’s 3 billion euros credit line to a troubled Angolan subsidiary but will immediately take provisions for losing the entire amount, the Bank of Portugal said on Tuesday.
The new bank, Novo Banco, was created to take on the healthy assets of one of Portugal’s largest banks, leaving shareholders, junior creditors and troubled Espirito Santo family loans behind in the original bank.
In a statement to Reuters, Bank of Portugal said that Novo Banco would also take on the interbank loans granted to BES’s troubled Angolan subsidiary but that the credit line had been “fully provisioned”.
“The total provisionining for these credits is only a measure of caution and does not reflect, in any way, a lack of expectations of recovering the loans,” the Bank of Portugal added in the statement.
The Bank of Portugal also said that the rescue of BES had been designed so that no creditor would face a greater loss now than they would have if the bank had been liquidated.
Reporting By Laura Noonan and Andrei Khalip, editing by Axel Bugge