Brussels, 24/07/2013 (Agence Europe) - On Wednesday 24 July, the European Commission gave the go-ahead to the restructuring plans of two Portuguese banks, Caixa Geral de Depositos (CGD) and Banco BPI (BPI) and agreed with the Portuguese government on the plan for Banco Comercial Português (BCP), which it will decide upon in the next few weeks.
According to the restructuring plans and agreement, the three banks will improve the profitability of their domestic operations, in particular by reducing their staff numbers and the size of their branch networks. They will strengthen their business models and ensure continued lending to the Portuguese economy. CGD will furthermore divest its largest subsidiary which is active in the insurance business; to that end, Portugal has already started a sales process in June 2013. The Commission says the plans will make the three banks viable without continued state aid the plans demonstrate that the banks are viable without continued state support, contribute to a sufficient level to the costs of restructuring and include adequate safeguards to limit the distortions of competition created by the state support. In June 2012, CGD was bailed out to the tune of €1.65 billion euros, BPI by €1.5 billion and BCP by €3 billion (see EUROPE 10626). The Commission is in the process of negotiating on Banif, the fourth Portuguese bank bailed out by the state (see EUROPE 10768). (FG/transl.fl)