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| Portugal unveils bank rescue plan | Portugal unveils bank rescue plan |
| (35 minutes later) | |
| Portugal's central bank has announced a plan to rescue the troubled lender Banco Espirito Santo (BES). | Portugal's central bank has announced a plan to rescue the troubled lender Banco Espirito Santo (BES). |
| The group will be split into two - a "good bank" with the healthy assets and a "bad bank" with the riskier ones. | The group will be split into two - a "good bank" with the healthy assets and a "bad bank" with the riskier ones. |
| The "good bank", Novo Banco, will get an injection of 4.9bn euros ($6.6bn; £3.9bn) from Portugal's bailout fund. | |
| The move had been expected after BES on Friday reported a bigger than expected loss of 3.6bn euros for the first six months of the year. | |
| Since June, when concerns about the financial health of the company first came to light, its shares have plunged 89%. | |
| In a statement, Novo Banco's chief executive, Vitor Bento said that "they key uncertainties that have been hanging over the institution for some time have now been removed". | |
| "Novo Banco is also taking with it... a dedicated workforce, a strong customer focus and comprehensive banking services that help to drive the Portuguese economy," he added. | |
| Mr Bento was installed as chief executive of BES just three weeks ago as part of a management reshuffle designed to restore confidence in the bank. | |
| The European Commission said it approved of the rescue plan. | |
| "The adoption of this resolution measure is adequate to restore confidence in financial stability and to ensure the continuity of services and avoid potential adverse systemic effects," it said in a statement. | |
| Analysis: Alison Roberts, BBC News, Lisbon | |
| The Banco Espírito Santo (BES) rescue marks a significant shift in banking supervision in the eurozone, in that shareholders are to shoulder a larger proportion of losses than was the case in previous bank bailouts. | |
| Still, it is ultimately Portugal's taxpayers underwriting the loan to the newly created bank that is to take over BES's viable commercial activities, since the funds are coming from a part of Portugal's eurozone bailout that the country had not so far needed to draw on, but which it will have to pay back. | |
| There are also questions about the Portuguese authorities' handling of the situation. | |
| Barely a month ago, they waved through a capital increase in which BES raised €1 billion - money that all but vanished as the share price plummeted. | |
| Such doubts could make it harder for Portuguese companies to raise money in future - while the Portuguese government is already facing financing costs. |