Portugal's Novo Banco bidders accepted for next phase of sale

The Bank of Portugal revealed on Monday 15 of 17 bidders for Portuguese Novo Banco, the bank that emerged from the breakup of beleaguered bank Banco Espirito Santo, will pass on to the second phase of the sale, according to local media reports.

Two of the candidates were excluded because they failed to meet eligibility requirements.

"The Bank of Portugal proceeded to the verification of compliance with eligibility requirements by each of the entities, and has opportunely determined that the requirements were met by 15 of the entities," the central bank said in a statement.

The list of potential bidders approved include BPI, Santander Totta, Banco Popular, BBVA and the Bank of China, and they must sign a "confidentiality agreement" by March 20, according to the statement.

Banco Espirito Santo was bailed out in August last year after a first-half net loss of 3.58 billion euros (4.06 billion U.S. dollars). The bank's former chairman Ricardo Espirito Santo Silva Salgado was arrested for alleged tax fraud and money laundering but was released after paying a 3-million-euro bail.

The bank was split into a "bad bank" which houses toxic assets and liabilities, and a "good" bank, which houses viable assets like branches, employees and senior debtors. The good bank is now called "Novo Banco" (New Bank).

Novo Banco named Eduardo Stock da Cunha, a former director at London's Lloyds Banking Group as its new chief executive, just days after Vitor Bento and his top two key executives said they had tendered their resignations.

Vitor Bento took over the leadership of bank BES, after the bank's previous boss Ricardo Salgado and two senior board members stepped down in July.

The eventual sale of Novo Banco will pay for the state's 4.9-billion-euro bailout, according to the authorities. ( 1 euro = 1.13 U.S. dollars) Enditem