Portugal BCP bank to mull 1.12 billion euros capital hike

LISBON (Reuters) – Shareholders in Portugal’s largest listed bank, Millennium bcp (BCP.LS: Quote, Profile, Research), have proposed to increase the bank’s capital by 1.12 billion euros ($1.58 billion), BCP said in a statement on Tuesday.

It said that according to the plan to be presented to a shareholder assembly on April 18, the bank plans to issue 1 billion euros’ worth of new shares to be swapped for existing BCP perpetual bonds.

The rest of the rights issue is to be done by incorporation of issue premium.

Portuguese banks have been squeezed out of the interbank credit market by Portugal’s sovereign debt crisis and many analysts say they need to raise their capital ratios to cope with the difficult environment and reduce their reliance on European Central Bank funds.

BCP board member Antonio Ramalho told Reuters the bank expected its core Tier 1 ratio to rise to between 8.5 and 9 percent after the planned rights issue from 6.7 percent at the end of 2010.

“The bank will be adequately capitalized,” he said.

BCP said the new shares’ issue value was yet to be established, but it would not involve a premium and would correspond to the weighted average of a BCP share price in the five days before the public offer is launched.

The minimum limit is 0.625 euro, with the maximum number of shares to be issued set at 1.6 billion.

BCP shares had closed 2.3 percent lower at 0.593 euro before the announcement.

BCP shareholders include Angolan state oil company Sonangol, Spanish bank Sabadell (SABE.MC: Quote, Profile, Research) and Portugal’s main utility EDP-Energias de Portugal. (EDP.LS: Quote, Profile, Research)

(Reporting by Andrei Khalip, editing by Matthew Lewis)

Portugal BCP bank to mull 1.12 billion euros capital hike