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Santander considers acquiring remnants of Portugal’s fallen Espirito Santo empire

Spanish family-owned banking group Santander has expressed an interest in acquiring Novo Banco, the Portuguese lender introduced to rescue assets from the failed Espirito Santo banking dynasty.

Spanish family-owned banking group Santander has expressed an interest in acquiring Novo Banco, the Portuguese lender introduced to rescue assets from the failed Espirito Santo banking dynasty.

According to Bloomberg, Santander’s chief executive Javier Marin told local reporters that the family firm would consider acquiring Novo Banco once a forthcoming audit gave a clearer picture of its current standing.

“Like all the other markets where we operate, our obligation is to analyse all opportunities,” the chief executive said. “In regards to Novo Banco, when we know about the circumstance we will look at the bank as a whole”.

Fourth-gen Ana Botin recently became chair of the bank after the sudden death of her father Emilio Botin, who had been at the helm since 1986.

Novo Banco was spun off from Banco Espirito Santo (BES) in August after accounting irregularities at the firm’s holding company, Luxembourg-based Espirito Santo International.

In response, the Bank of Portugal announced a €4.9 billion bailout plan that saw BES split into two banks. Deposits, senior debt, and good assets were transferred to the taxpayer in the form of Novo Banco, with the intention that it would eventually sold, while a “bad bank” would remain the responsibility of the family and take the brunt of the Espirito Santo fallout.

Third-gen chief executive Ricardo Salgado was removed from his position shortly before the bailout and questioned on charges of money laundering and tax evasion. He is currently not allowed to leave Portugal or contact certain former colleagues.

Novo Banco recently announced that it is seeking to sell a portfolio of commercial properties worth around €200 million, reportedly made up from less than 20 properties.

Portugal’s Banco BPI is already in talks to acquire Novo Banco, yet Portugal’s prime minister, Pedro Passos Coelho, has acknowledged there is a possibility a sale may not recoup the €4.9 billion already invested.

The Espirito Santo family lost control of BES’s Portugal operations once before when it was nationalised by the revolutionary government of 1975 but regained control 16 years later.

Marin added that Santander is currently “very happy” with organic growth in Portugal. 


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