Financial Crime World

Restructuring of Banco Espírito Santo Angola (BESA)

The restructuring of Banco Espírito Santo Angola (BESA) was a significant event that had far-reaching consequences for the Angolan financial system. Here are some key points about the restructuring and its impact:

Background

  • BESA registered approximately US$5 billion in bad loans, leading to a substantial increase in non-performing loans (NPLs).
  • The Angolan State intervened by issuing a sovereign guarantee for BESA’s liabilities.

Restructuring Measures

Extraordinary Reorganization Measures

  • Appointment of provisional directors
  • Temporary waiver of prudential rules
  • Detailed assessment of BESA’s loan portfolio and assets to be disposed of in the event of liquidation or restructuring
  • Restrictions on commercial activities

These measures were applied by the Central Bank of Angola with the aim of addressing BESA’s financial difficulties.

Impact

Withdrawal of Sovereign Guarantee

  • The application of these measures led to the withdrawal of the sovereign guarantee, which was a crucial step in ensuring the bank’s solvency and stability.
  • Provisional directors were given the mandate to veto any actions that could compromise the bank’s solvency or stability.

Capital Injection

  • BESA’s shareholders were required to inject capital into the bank, which was subsequently transformed into Banco Económico, S.A.
  • This capital injection was a critical step in restoring the bank’s financial health and ensuring its long-term sustainability.

State Purchase of Assets

  • The Angolan State issued public debt to purchase ex-BESA’s assets and credits.
  • This move helped to stabilize the banking system and ensure the continuity of essential services.

Conclusion

The restructuring of BESA involved a significant intervention by the Angolan State and the Central Bank of Angola, aimed at addressing the bank’s financial difficulties and maintaining financial stability in the country. The measures taken have had a lasting impact on the Angolan financial system, and it is likely that their effects will be felt for many years to come.