BES has 175 million assets to cover 10.6 billion liabilities

Banco Espírito Santo, which is in liquidation, does not have the funds to pay creditors other than the settlement fund. The Bank's report and accounts for 2023 confirm this ruling, which was determined when the Supreme Court of Justice, the highest court, decided in July to recognize premium appropriations from the Resolution Fund, in a total amount of 2,706.6 million euros.

According to the 2023 accounts, total assets amount to 174.7 million euros, while liabilities amount to 10.6 billion euros.

The Resolution Fund will hold all funds generated from the liquidation of Banco Espírito Santo.

Of the money received by the Resolution Fund, at the end of the liquidation, it will still have to pay 31.7% of the investment to joint creditors, according to the report of an independent auditor – called to assess whether creditors have lost more with the resolution rather than with the immediate liquidation of the bank and thus determine whether There will be compensation from the Resolution Fund. Deloitte concluded that shareholders and creditors with subordinated debt will not be entitled to any compensation from the entity led by Máximo dos Santos, but joint creditors will be able to get 31.7% of their exposure to the bank if it is liquidated on August 3. 2014.

But until then, all creditors must be recognised.

The foundation led by Luis Máximo dos Santos has already said that the right “to receive compensation from the Resolution Fund will be determined at the end of the BES liquidation process.”

The Liquidation Committee, chaired by Cesar Pinto Brito, states in the report that “Given that the Resolution Fund credits have been recognized and classified as premium, and given that the assets of BES are insufficient to pay the Resolution Fund premium credits, BES will not have the balance to pay the following categories of credits (general and Secondary). Therefore, the Liquidation Committee published a statement on 11 August 2023 on its website, informing of these court decisions and drawing attention to the guideline in applying the BES resolution procedure that no shareholder or creditor of the credit institution shall be subject to the resolution that may suffer a loss greater than It would have been incurred if that institution had gone into liquidation – also called There is no worse creditor in principle“.

Banco Espírito Santo, in liquidation, saw its losses worsen from 255 million to 3.06 billion euros, with negative equity expected to reach 10.5 billion euros (compared to 7.4 billion euros the previous year).

The justification for most of this increase is the recognition by the Supreme Court of Justice of the Creditors' Settlement Fund of €2.7 billion, which means that BES will be required to use the entire insolvent property to pay part of the fund's support. .

“Following the challenge to the list of creditors, the Supreme Court of Justice, by its ruling of 11 July 2023, as well as the Commercial Court, with rulings issued in three subsequent credit verification procedures, decided that the privileged credits of the creditors of the Resolution Fund will be recognized in a total amount of 2,706,597 thousand euros,” it reads. Report and accounts.

In detail, the Supreme Court supported the request submitted by the Settlement Fund regarding the recognition of a distinguished loan in the amount of 1,242.6 million. This decision cannot be appealed, so the credit is final and becomes an obligation of BES.

Furthermore, the Commercial Court ruled “the additional credits requested by the Settlement Fund as part of three credit verification procedures, in the amount of €1,464.02 million.” There was no appeal from the Liquidation Committee in these proceedings, meaning that FDR's appropriations also became final.