Portugal to bail out largest listed bank

Portugal will spend €4.9bn to rescue its largest listed bank, testing the eurozone’s resilience to another banking crisis just months after Lisbon exited an international bailout.

The rescue of Banco Espirito Santo, which was unveiled after a frenzied weekend of discussions between Portuguese and EU officials, comes after weeks of increasingly bad news about the financial state of the lender.

Under the plan, Banco Espirito Santo will be split into a good bank, renamed Novo Banco, and a bad bank, which will house Banco Espirito Santo’s exposures to the troubled Espirito Santo business empire as well as its Angolan subsidiary.