LISBON (Reuters) - The European Commission has approved a restructuring plan for Portuguese lender Millennium BCP (BCP.LS), including the future sale of its Romanian operation and Greek assets while retaining its profitable Polish arm.
BCP must sell assets and cut costs in exchange for 3 billion euros ($4 billion) in convertible bonds drawn last year from a recapitalization line in Portugal’s 78 billion euro bailout by the EU and IMF.
The country’s largest listed bank said that Monday’s agreement shows that its business is viable without the need for continued state support.
It said in a statement that, while the plan includes the sale of the Romanian unit and of a stake in Greek bank Piraeus (BOPr.AT), Polish operation Bank Millennium (MILP.WA) is seen as a “core operation” for the future.
“There is no commitment to sell it unless the amount of convertible bonds to be paid (by BCP) in December 2016 exceeds 700 million euros,” the bank said. BCP’s Angolan and Mozambique operations are also seen as core.
The bank is expected to continue its deleveraging efforts by reducing non-core assets, with the aim of achieving a minimum return on equity of 10 percent from 2016 and a 25 percent reduction in staff-related costs in the 2012 to 2015 period.
“It was the best possible deal for all parties involved, allowing the bank to keep its core assets and continue to undertake its activity in its main lines of business, with lower execution risk, Chief Executive Nuno Amado said.
($1 = 0.7584 euros)
Reporting by Daniel Alvarenga; Editing by David Goodman