Banco Comercial Portugues SA (BCP), Portugal’s second-biggest bank by market value, declined to a record low in Lisbon trading today after tapping state funds to bolster its finances.
Banco Comercial fell as much as 18 percent and closed down 8 percent at 8.2 euro cents, giving the lender a market value of 591 million euros ($740 million).
Banco Comercial dropped for a third day since Portugal said on June 4 that it has committed to buying 3 billion euros of hybrid securities from the lender with an initial annual interest rate of 8.5 percent. The state also plans to underwrite Banco Comercial’s planned 500 million-euro capital increase at a price of 4 cents a share.
“The capital increase was higher than expected and continues to weigh on Banco Comercial shares,” said Jose Novo, a trader at Orey iTrade in Lisbon. “It will be hard for BCP to pay back the state after the capital increase.”
Banco Espirito Santo, which completed a 1.01 billion-euro share sale on May 2 that was fully subscribed to by investors, rose 2.3 percent to close at 53 cents in Lisbon trading.
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