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50 per cent wiped off bank assets

Portuguese banks Espírito Santo and Millennium bcp are among 16 European banks which have seen around 50% of their value wiped out by the financial crisis.

According to the British Financial Times, the Portuguese banking sector has lost half of its share value on the world’s stock markets since the beginning of the year.

On Thursday, September 22, alone (Black Thursday) the Lisbon stock market plummeted 5.22%, leading to the nation’s main banks seeing €221.6 million vaporised on the PSI 20.

Some bank shares hit historically rock bottom values, as is the case with BCP (18 cents a share), BPI (0.60 cents a share) and Banif (0.38 cents a share).

BCP, which is headed by Santos Ferreira, is worth 66% less on the stock market today than it was worth in 2010.

BES, led by Ricardo Salgado, has lost 36% of its value and according to the FT both banks are among 16 European banks which need urgent recapitalisation.

Last week BCP launched an exchange offer of three debt issues to beef up its capital ratios.

If the offers are successful, the bank would achieve a Tier 1 Core Capital status with 9% capital by the end of the year, as demanded by the Bank of Portugal.

Last week BPI’s CEO, Fernando Ulrich, stated that the “Prime Minister was taking a pragmatic and common sense attitude”, in admitting that Portugal could need a further bailout.

Ulrich criticised the demands by the IMF for higher capital ratios on the part of the banks. “Right now the banks need financing in order to enable them to finance the economy,” he said.