Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
The JP Morgan building/AFP

World

Portugal to take two banks to court over swap deals

The JP Morgan building/AFP

The JP Morgan building/AFP

LISBON, Apr 27 – Portugal said Friday it will take banking giants JP Morgan and Santander to court to make them renegotiate deals that have left state-run companies paying hefty interest rates.

Treasury Secretary Maria Luis Albuquerque said the government had failed to reach a deal with US bank JP Morgan and Spanish bank Santander’s local unit to overhaul so-called “toxic swap” contracts that are weighing down public companies and threatening Portugal’s debt-slashing efforts.

“It has not been possible to reach a deal” after two months of negotiations, she told a press conference.

“The government will defend the taxpayers’ interests in court.”

The finance ministry said earlier this week that it had found state-run firms were facing some three billion euros ($3.9 billion) in losses caused by “highly speculative” financial deals signed in recent years.

The deals involve swaps that have pushed up the interest rate on some loans to 20 percent.

The finance ministry blamed the deals on the former socialist government, ousted by current Prime Minister Pedro Passos Coelho’s centre-right coalition in June 2011.

The discovery was a serious blow to the small eurozone country, which is already scrambling to meet the austerity conditions linked to a 78-billion-euro bailout.

Luis Albuquerque said some banks had agreed to renegotiate the contracts, enabling the government “to save 170 million euros in interest in the coming years”.

Three other banks have asked to extend negotiations to next week, she added.

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...