Banco Espirito Santo SA fell the most in 17 months after Portugal’s biggest publicly traded lender posted an unexpected first-quarter loss and its chief executive officer said he can’t guarantee positive results for this year.
Banco Santander SA’s completion of a 7 billion-euro ($9.4 billion) real estate cleanup is shifting the spotlight to how it will address investor concerns about capital and fix businesses in the U.K. and Brazil.
Spain’s 41 billion-euro ($54 billion) rescue of lenders, prompted by record losses at Bankia, won’t spell the end of troubles for the nation’s financial industry as the economy remains mired in recession.
Spanish banks have more than 30 billion euros ($39 billion) in debt coming due in the next four months. That’s spurring investor doubt on their future profitability as higher financing costs eat into margins.
Banco Sabadell SA agreed to acquire stricken Spanish lender Caja de Ahorros del Mediterraneo for one euro in a deal financed and guaranteed by Spain’s commercial lenders to shield the national budget from losses.
Spain’s bad bank will buy foreclosed real estate assets at an average discount of 63 percent as the state seeks investors to become shareholders in the 60 billion- euro ($77 billion) facility, the bank-rescue fund said.