Portuguese bank BES' shares tumble after management change

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 founding family's empire.
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 ($106 billion) international bailout -- underscored the eurozone economy's fragile recovery.
German Chancellor Angela Merkel voiced concern on Saturday, saying that the developments in Portugal "demonstrate the speed at which markets take fright and the point at which the euro remains fragile".
ETX Capital analyst Daniel Sugarman noted Monday, however, that Portuguese bonds had recovered after Prime Minister Pedro Passos Coelho said there would be no state bailout of BES.
The yield on 10-year Portuguese debt fell to 3.81 percent on Monday, from 3.87 percent on Friday.
"Coelho put the onus on private businesses, rather than taxpayers, to assist the bank with its finances," Sugarman said.
Salgado, the patriarch of the bank's founding family and head of the bank for 23 years, tendered his resignation last month following the discovery of accounting irregularities by the bank's holding company.
Analysts suspect that the family-run Espirito Santo International (ESI) covered up a 1.3 billion euro hole in its accounts.
The family has cut its BES stake by almost 5.0 percent to 20.1 percent to raise cash to pay maturing debt.