Troubled Portuguese bank halts steep share slide

AP News
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Posted: Dec 15, 2015 7:24 AM

LISBON, Portugal (AP) — Shares in Portuguese bank Banif on Tuesday halted their recent steep fall after its chairman gave assurances there were no plans to close the troubled financial institution.

Shares in Banco Internacional do Funchal SA lost more than half their value last week, dropping to 0.0006 euro ($0.0007) on the Lisbon stock exchange, after news reports the bank could collapse and close its doors. But in morning trading Tuesday they recovered to 0.001 euro.

Banif executive chairman Jorge Tome said in a television interview late Monday that six international investors are considering buying a stake in the loss-making bank and that its liquidity levels are "comfortable."

The government holds some 60 percent of Banif stock after using 1.1 billion euros of public money for a capital increase and a loan to prevent the bank's collapse in 2012 when the European financial crisis was especially acute.

Banif is a medium-size player in Portugal's banking sector, which remains hobbled by the financial crisis in the country over the past few years. Most banks are still struggling to achieve pre-crisis levels of growth and profitability.

The new Socialist government says it will act to ensure investor confidence in the sector. It is also currently weighing how best to sell Novo Banco, the so-called good bank salvaged from last year's collapse of major lender Banco Espirito Santo.