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August 2, 2016

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Home » Business » Finance

Fosun’s interest lifts Portuguese bank

Source: AP | August 2, 2016, Tuesday | Print Edition

SHARES in Portugal’s Banco Comercial Portugues were volatile yesterday after China’s Fosun made a surprise offer to take an almost 17 percent stake in the country’s largest listed bank by assets.

BCP’s share price jumped 7 percent in early trading before falling back to trade 2 percent higher at 0.02 euros (2 US cents) a share.

The bank’s board announced the proposal from Fosun Industrial Holdings Limited on Saturday, saying it had “many positive aspects” and would be analyzed in coming days. It added that Fosun is considering ultimately buying up to 30 percent of BCP. No cash value was put on the stake.

Like much of the Portuguese banking sector, BCP has struggled to make a profit in recent years amid low interest rates and soured loans. The global financial crisis and Portugal’s economic woes after needing a 78 billion-euro bailout in 2011 have also taken their toll, with BCP's share price falling from more than 3 euros a share in 2008.

Analysts expect the Portuguese financial sector to consolidate, either via mergers or alliances with banks in Spain, and Fosun’s interest was a surprise. The Shanghai-based conglomerate owns Club Med and other businesses in Europe, including Portugal’s biggest insurer, Caixa Seguros.

BCP has assets of over 75 billion euros, according to European banking authorities. It has had mixed success in its battle to restore profitability, posting losses of 197 million euros in the first half of this year, down from a profit of 241 million a year ago.

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