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Banco Espírito Santo (, BES) was a Portuguese
bank A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
based in
Lisbon Lisbon ( ; ) is the capital and largest city of Portugal, with an estimated population of 567,131, as of 2023, within its administrative limits and 3,028,000 within the Lisbon Metropolitan Area, metropolis, as of 2025. Lisbon is mainlan ...
that on 3 August 2014 was split in two banks:
Novo Banco Novo Banco, SA, trading as Novobanco (, ), is a major Portuguese financial bank headquartered in Lisbon, Portugal. Following the entry into force of European Banking Supervision in late 2014, Novobanco has been designated as a Significant Institut ...
, which kept its healthy operations, and a "
bad bank A bad bank is a corporate structure which isolates illiquid and high risk assets (typically non-performing loans) held by a bank or a financial organisation, or perhaps a group of banks or financial organisations. A bank may accumulate a large p ...
" to keep its toxic assets. It once was the second-largest listed Portuguese bank and the ninth-largest contributor to the
PSI-20 The PSI-20 (an acronym of Portuguese Stock Index) is a benchmark stock market index of companies that trade on Euronext Lisbon, the main stock exchange of Portugal. The index tracks the prices of the twenty listings with the largest market capita ...
index. BES was the second-largest private financial institution in Portugal in terms of
net assets Net worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities. Financial assets minus outstanding liabilities equal net financial assets, so net w ...
(€80,700 million in March 2011), with an average market share of 20.3% in Portugal and 2.1 million clients. On 3 August 2014,
Banco de Portugal The Banco de Portugal (, ) is the National central bank (Eurosystem), national central bank for Portugal within the Eurosystem. It was the Portuguese central bank from 1846 to 1998, issuing the Portuguese escudo, escudo. Since 2014, it has also ...
, Portugal's
central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
, intervened in the bank by applying
resolution measure
that split the bank in two. The bank was split into a healthy bank ("good bank"),
Novo Banco Novo Banco, SA, trading as Novobanco (, ), is a major Portuguese financial bank headquartered in Lisbon, Portugal. Following the entry into force of European Banking Supervision in late 2014, Novobanco has been designated as a Significant Institut ...
, while the toxic assets remained in the existing bank ("bad bank") which entered into liquidation in 13 July 2016. Novo Banco received a €4.9 billion bailout to be recapitalized. The bailout was funded by the Portuguese Resolution Fund (), to which the Portuguese government lent €3.9 billion. The Resolution Fund became the sole owner of Novo Bank. It has since been proven that the administration of BES led by Ricardo Salgado "disobeyed the Bank of Portugal 21 times, between December 2013 and July 2014", practising "wilful acts of ruinous management".


History

Banco Espírito Santo's origins began with the
lottery A lottery (or lotto) is a form of gambling that involves the drawing of numbers at random for a prize. Some governments outlaw lotteries, while others endorse it to the extent of organizing a national or state lottery. It is common to find som ...
, currency exchange, and securities business carried out by José Maria do Espírito Santo e Silva between 1869 and 1884. The first references to trading that the “patriarch of the only dynasty of Portuguese bankers” was undertaking was in the purchase and sale of lotteries, along with national and international transactions in loan securities, on his own account. This took place in his Casa de Cambio, situated in centre of Lisbon and which dated back to the second half of the 19th century (1869). Since then and until 1920, he founded a number of banking institutions, such as Beirão, Silva Pinto & Cª., (1884–1887), Silva, Beirão, Pinto & Cª. (1897–1911), J. M. Espírito Santo Silva (1911–1915), and J. M. Espírito Santo Silva & Cª. (1915). In 1915, after the death of José Maria do Espírito Santo e Silva, these firms were dissolved and his heirs founded the Casa Bancária Espírito Santo Silva & Cª, which was transformed into a public limited-liability company in 1920 under the name Banco Espírito Santo with the bank, in this decade, managing to consolidate its position within the context of national banking by opening agencies and using a renewed management model. During Ricardo Ribeiro do Espírito Santo Silva's time in control of BES, the bank merged with ''Banco Comercial de Lisboa'', changing its name to ''Banco Espírito Santo e Comercial de Lisboa'' in 1937. It opened branches throughout the country and became Portugal's leading private bank. The purchase of the ''Comercial de Lisboa'' gave BES the capacity to exploit
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
financially through international transactions for products such as
tungsten Tungsten (also called wolfram) is a chemical element; it has symbol W and atomic number 74. It is a metal found naturally on Earth almost exclusively in compounds with other elements. It was identified as a distinct element in 1781 and first ...
, which was much in demand by the Germans. In 1937, the bank strengthened its position in
commercial banking A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...
through a merger with Banco Comercial de Lisboa to form Banco Espírito Santo e Comercial de Lisboa (BESCL), which again changed its name to BES in 1999. Up to the mid-1970s, BESCL reinforced its international presence with acquisitions,
partnerships A partnership is an agreement where parties agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations m ...
, and the creation of banks in countries such as the United States,
Angola Angola, officially the Republic of Angola, is a country on the west-Central Africa, central coast of Southern Africa. It is the second-largest Portuguese-speaking world, Portuguese-speaking (Lusophone) country in both total area and List of c ...
, and the United Kingdom, among others. Under a Decree Law of 1975, the bank was nationalised and the Espírito Santo family was prevented from doing business in Portugal. Within this context, the family re-established its financial interests abroad in countries such as
Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
,
Switzerland Switzerland, officially the Swiss Confederation, is a landlocked country located in west-central Europe. It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland ...
, France, and the United States, culminating in 1975 with the creation of a
holding company A holding company is a company whose primary business is holding a controlling interest in the Security (finance), securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own Share ...
based in
Luxembourg Luxembourg, officially the Grand Duchy of Luxembourg, is a landlocked country in Western Europe. It is bordered by Belgium to the west and north, Germany to the east, and France on the south. Its capital and most populous city, Luxembour ...
. This company was the predecessor of the
Espírito Santo Financial Group The Espírito Santo Financial Group (ESFG) was a Portuguese holding company with headquarters in Luxembourg, founded in 1984. The group represents the interests of the Portuguese ''Espirito Santo Group'', which has major investments in Portugal ...
(ESFG). The return to Portugal began in 1986 in partnership with
Crédit Agricole Crédit Agricole Group (), sometimes called La banque verte (, , due to its historical ties to farming), is a French international banking group and the world's largest cooperative financial institution. It is the second largest bank in France, ...
and with the support of a core group of Portuguese shareholders. They formed the Banco Internacional de Crédito (BIC), also forming Espírito Santo Sociedade de Investimentos (ESSI), together with Swiss bank
UBS UBS Group AG (stylized simply as UBS) is a multinational investment bank and financial services firm founded and based in Switzerland, with headquarters in both Zurich and Basel. It holds a strong foothold in all major financial centres as the ...
and
KBC Bank KBC Group N.V. is a Belgian universal multi-channel bank-insurer, focusing on private clients and small and medium-sized enterprises in Belgium, Bulgaria, Czech Republic, Hungary, and Slovakia. It was created in 1998 through the merger of Kredi ...
of Luxembourg. In 1990, the Espírito Santo Group recovered Companhia de Seguros Tranquilidade — the Espirito Santo family held a stake since 1935 — and the control of Banco Espírito Santo in 1991 with the creation of a
holding company A holding company is a company whose primary business is holding a controlling interest in the Security (finance), securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own Share ...
between ESFG and Crédit Agricole, called BESPAR. In 1992, BES began operating in the
Spanish Spanish might refer to: * Items from or related to Spain: **Spaniards are a nation and ethnic group indigenous to Spain **Spanish language, spoken in Spain and many countries in the Americas **Spanish cuisine **Spanish history **Spanish culture ...
market where it created Banco Espírito Santo S.A. and in 1995, to open Banco Espírito Santo do Oriente (BESOR) that offers corporate and investment solutions to private clients. Also, in 2001,
Banco Espírito Santo Angola Banco may refer to: Places * Banc (Barcelona Metro), also called Banco, a closed metro stop on the Barcelona metro * Banco, Virginia, an unincorporated community * Banco, West Virginia, an unincorporated community * Banco National Park, a nationa ...
, a bank formed under
Angola Angola, officially the Republic of Angola, is a country on the west-Central Africa, central coast of Southern Africa. It is the second-largest Portuguese-speaking world, Portuguese-speaking (Lusophone) country in both total area and List of c ...
n law, was founded. In the first six months of 2014 the bank lost the equivalent of $4.8 billion raising concerns about the health of the bank. BES shares fell by 89 per cent. On 3 August 2014, Portugal's central bank announced BES would be restructured by splitting the bank in two. This announcement, following BES record Q2 loss of €3.49 billion, allowed Portuguese stocks to outperform the broader European market the next day.


Former structure

BES has had a stable shareholder structure since 1991. The main shareholders, ESFG and Crédit Agricole, hold 50.8% of the capital. The Group's presence today is felt in 23 countries on four continents through branches, offices of representation, or sub-companies, making the Banco Espírito Santo Group the most international of the Portuguese financial groups. Since 2007, BES has been the only Portuguese bank to be included on the sustainability index FTSE4Good Index reinforcing its positioning as a socially responsible institution. On 3 January 2011, BES was nominated "Best Trade Financial Bank" in Portugal for the fifth consecutive year by ''Global Finance'' magazine.


See also

*
Cardmobili CardMobili is a European-based mobile application development company founded in 2009. The primary application of the company, also named CardMobili, provided a platform for managing customer loyalty programs via mobile phones. The application ...
*
Espírito Santo Financial Group The Espírito Santo Financial Group (ESFG) was a Portuguese holding company with headquarters in Luxembourg, founded in 1984. The group represents the interests of the Portuguese ''Espirito Santo Group'', which has major investments in Portugal ...
*
Inter-Alpha Group of Banks The Inter-Alpha Group of Banks was created in 1971 by six banks in the European Community to provide a platform for the regular exchange of ideas and to explore areas for cooperation between its member banks. The group is a non-hierarchical associat ...


References

{{DEFAULTSORT:Banco Espirito Santo Bank failures Defunct banks of Portugal Banks established in 1869 Banks disestablished in 2014 1869 establishments in Portugal