Banco BPI expects to resolve its excessive exposure to risky Angolan assets, its chief executive said on Friday, and may try to swap Angolan shareholder Isabel dos Santos’ stake in the Portuguese bank for control of its Angolan unit BFA.
“I don’t see how it could not end well. I just don’t know exactly how and when,” CEO Fernando Ulrich said on Friday, adding that there were at least three potential solutions that addressed concerns previously expressed by dos Santos.
Spain’s Caixabank, BPI’s largest shareholder with a 44 percent stake, failed this month to reach a deal that would have allowed Caixabank to buy dos Santos out and enabled BPI to offload control of BFA to a company she partly owns.
Caixabank last week launched a takeover bid for the shares in BPI its does not already own. Dos Santos, who is the daughter of Angolan President Jose Eduardo dos Santos, owns an 18.6 percent stake in BPI.
BFA is BPI’s most profitable business, but under new European rules the Angolan exposure is considered risky and has to be fully provisioned for, significantly reducing BPI’s solvency ratios. BPI faces hefty fines if it does not comply with the new rules soon.
Ulrich said the possible solutions were “all excellent and relatively easy to carry out”, addressing the main concerns expressed by dos Santos’ Portuguese company Santoro, namely protecting the interests of minority shareholders and avoiding a withdrawal of currency assets from crisis-hit Angola.
Aside from the swap of stakes between Santoro, BPI and BFA, which Ulrich said “will not take a single dollar out of Angola” and allow BPI shareholders to keep a minority stake in BFA, another option is to spin off BPI’s African assets, a plan which dos Santos had previously rejected.
And if Caixabank does take over BPI, this would make the Angolan exposure negligible relative to Caixabank’s overall capital, possibly helping it to avoid ECB sanctions, he said.