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New management causes steep drop of BES shares

LISBON, Portugal--Shares in Portugal's largest listed bank, Banco Espirito Santo (BES), plunged further Monday as the arrival of new directors failed to shake off worries about the bank's future.

After posting an early gain of almost 6.0 percent on news that new managers had taken over, BES shares then nosedived. When the market closed, they were down by 7.48 percent at 0.44 euros.

The PSI-20 index on which the bank's shares are listed was 0.63 percent higher overall.

BES shares were suspended from trading last week after slumping more than 17 percent on Thursday, and they lost another 5.5 percent on Friday as trading resumed.

Under pressure from Portugal's central bank, BES named a new team of directors on Sunday, with former boss Ricardo Espirito Santo Salgado handing over to economist and former central bank official Vitor Bento.

Officials in Lisbon and other eurozone capitals want to ensure that trouble at BES, which rocked markets last week, does not affect other financial networks.

Concerns that the troubles could have a wider impact on Portugal — which only two months ago exited a three-year, 78-billion-euro (US$106 billion) international bailout — underscored the eurozone economy's fragile recovery.

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