Banif S.A. announces recapitalisation plan

January 3, 2013
June 20, 2023
Banif S.A. announces recapitalisation plan

Banif, S.A. has formally announced a recapitalisation plan that will be submitted for approval at the next General Meeting of Shareholders, to be held on the 16th of January 2013. With this recapitalisation, Banif will become one of the most capitalised banks in Europe, with an estimated Core Tier 1 ratio of over 12% after the second stage of the recap is completed. Banif Financial Group will bring its capital adequacy levels to the new Capital Requirements Directive and Regulations coming into force in 2013 and up to December 2019.

The Recapitalisation Plan is part of a wider strategy put in place by the Portuguese State to ensure that the banks in Portugal have adequate capital in line with the capital requirements regulations imposed on the Portuguese banks by Banco de Portugal of a Core Tier 1 ratio above 10% and simultaneously, to establish a prudential capital buffer, in order to be in a position to continue supporting the economy in times of stress.

The recapitalisation Plan was approved by the Portuguese regulators and authorities.

Banif Bank (Malta) plc

Banif Bank (Malta) plc has reacted positively to the announcement that its major shareholder has announced a Recapitalisation Plan. “The fact that the Portuguese State has recapitalised Banif reflects the systemic relevance and importance of the Group in the context of the Portuguese Financial System,” said Joaquim F. Silva Pinto, Chief Executive Officer of Banif Bank (Malta) plc. “This importance is highlighted by the fact that Banif's supervision will be transferred from Banco de Portugal to the European Central Bank.”

Banif Bank (Malta) plc has not been affected by the restructuring programme of the Group since it operates independently within the Maltese financial services framework. Banif Bank is a very important part of Banif's strategy and the Group views very favourably the development of its activity in Malta. Banif Bank (Malta) plc will remain one of the core elements of Banif Group and will continue to receive full support for its banking activities in Malta.

Banif Bank (Malta) plc is consistently meeting its targets and growth plans and will continue to invest and create job opportunities. The impact of Banif, SA’s recapitalisation plans on Malta is very positive, as the Group has strengthened its position in the global market and will remain very focused in developing its strategy including its growth and expansion plans for the Maltese market.

Banif, SA’s recapitalisation plan

The recapitalisation will be done under a facility created within Portugal's Economic and Financial Assistance Programme, signed with the European authorities and the IMF. From the total of €78 bln of the Programme, this facility has a total amount of €12 bln earmarked for the recapitalisation of the banking system. After the recap of Banif, the total amount used for recapitalisation of Portuguese Banks is €5,6bln.

The recapitalisation plan will be implemented in 2 stages and comprehend the following types of investment:

i)        An initial public investment of €1,100 million, following the approval of the Recapitalisation Plan, comprising:

a)        The issuance of contingent convertible bonds eligible as Core Tier 1 capital in the total amount of €400 million, pursuant to law nº 63-A/2008, November 24th and other applicable laws;

b)        Share capital increase of Banif, in cash with suppression of pre-emption rights, reserved for the subscription of the Portuguese State, totalling €700 million, through the issuance of of new shares, of which 44.511.019.900 shares with full voting rights at an issuance price of €0.01/share.    

ii)        At a second stage, an additional share capital increase of Banif (to be made by the end of June 2013), in the amount of €450 million, with subscription through a public offer on conditions yet to be defined. In the context and for the purposes of this second stage, the current reference shareholders have presented an underwriting commitment to subscribe €100 million shares.

The proceeds from the capital increase referred in ii) will be used for anticipated reimbursement of contingent convertible instruments.

After the 2 stages of the recapitalisation are completed, the Portuguese State will have a 49.4% stake in Banif and thus it will not have the majority of the voting rights. Besides, the State's participation in Banif is temporary, until 2017.