Portugal's BCP says to start repaying state funds early
LISBON, June 7
LISBON, June 7 (Reuters) - Portugal's largest listed bank by assets Millennium bcp hopes to repay early a significant part of 3 billion euros ($3.8 billion) in state funds it will take from the country's bailout package, its CFO Miguel Braganca told Reuters on Thursday.
His comments came after BCP stock hit a record low on Wednesday on fears its recapitalisation plan will dilute its capital and the bank may fail to pay back the state funds in time without compromising its capital ratios.
If the bank fails to pay back the funds from Portugal's bailout line, to be drawn on via bonds convertible into equity, to the state after five years, the state will take a permanent 40 percent stake.
But Braganca said projections of results for the next five years "show clearly" that the funds will be paid back and capital ratios will be preserved.
"Also, I want to draw attention to the fact that we intend to start the amortization significantly earlier, in 2014, whereas the instruments can be repaid in full by 2017," he said.
He added the bank's overall capital increase plan, that also includes raising 500 million euros from shareholders, will significantly reinforce the bank's solidity and resilience amid the country's recession and debt crisis.
Portugal's 78 billion euro EU/IMF bailout includes a 12 billion euro line for bank recapitalisation, as banks need to meet tough capital requirements set by the lenders and the European Banking Authority.
BCP shares, which started the week at 0.10 euros, slumped as low as 0.07 euros in intraday trading on Wednesday before bouncing back to stand at 0.081 euros on Thursday afternoon, 1.2 percent lower on the day.
Braganca said the stock's slide "is perfectly in line with the technical adjustments linked to capital increase operations". ($1 = 0.8001 euros) (Reporting by Sergio Goncalves; Writing by Andrei Khalip; Editing by David Holmes)
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