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Goldman Sachs faces BES losses
GOLDMAN Sachs lent over £500m to Banco Espirito Santo (BES) just a month before the Portuguese government was forced to bail out the crisis-hit bank.
The Wall Street bank bought up $835m (£503m) worth of the Portuguese lender’s bonds in July through a special investment vehicle, Oak Finance, with the intention of selling on the debt at a profit. However, Goldman is reportedly facing a loss after failing to pass on all of the debt.
BES, Portugal’s second-largest bank, came close to collapse due to its exposure to bad debts at a holding company controlled by the Espirito Santo family. The Portuguese government was forced into a €4.9bn bail-out.
Goldman Sachs did not comment.