June 11, 2014 / 4:11 PM / 4 years ago

BES chief executive says family lost control of bank

LISBON, June 11 (Reuters) - Portugal’s Espirito Santo banking family and its partner Credit Agricole have lost control of Banco Espirito Santo, Portugal’s largest bank, and will have to share control with other investors after a capital increase, the bank’s chief executive said on Wednesday.

Chief Executive Officer Ricardo Espirito Santo Salgado told Reuters that “since the moment that Bespar ceased to exist, control was lost.”

Holding company Bespar was owned jointly by Espirito Santo Financial Group (ESFG) - a holding company of the Espirito Santo family - and Credit Agricole. They abandoned the company in May in order and instead took direct stakes in BES.

Bespar held 47 percent of BES. After new shares are issued for Wednesday’s capital raise, ESFG will hold 25 percent of BES and Credit Agricole 15 percent.

“As such, the situations are very different, in which nobody has control,” the chief executive said. “There aren’t many banks at the European level that (have) such large shareholders.”

“The (Espirito Santo) group will have to share (control) with other shareholders and explain well what the strategies are and what policies to follow.”

The chief executive said Wednesday’s rights issue had been a “success” and pointed out that the demand for new shares was 178 percent higher than the supply.

Reporting By Sergio Goncalves, writing by Axel Bugge; Editing by Laura Noonan

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