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INTERVIEW-UPDATE 1-BES expects Q2 results better than Q1

Published 07/02/2009, 11:02 AM
Updated 07/02/2009, 11:09 AM

* Q2 results expected better than Q1, near to Q2 2008-CEO

* Boosted by expansion in international markets

* Bank expanding presence in emerging markets

(Adds more CEO comments, background on foreign presence)

LISBON, July 2 (Reuters) - Portugal's Banco Espirito Santo (BES) expects to post stronger second-quarter results than those it posted in the first quarter, boosted by its presence in emerging markets, bank CEO Ricardo Salgado said on Thursday.

BES, which is Portugal's second largest bank in terms of assets and its largest by market capitalisation, posted a 31 percent drop in net profit to 101.3 million euros in the first quarter, pressured by bad loans and a drop in trading gains.

"Regarding our (second quarter) results, we believe we will present an improvement in relation to the first quarter," Salgado told Reuters.

Salgado said the bank's strong presence in foreign markets, especially in emerging economies, contributed to the improvement in second quarter results.

"We should be close (in the second quarter) in the results to last year (second quarter)," he said. "In the first quarter we fell 30 percent and now we will probably show an improvement."

BES is expanding in fast-growing Portuguese-speaking markets like Brazil and Angola in order to diversify away from its slower domestic market. The bank also has operations in Spain and the United States.

BES' net profit from foreign operations jumped 49.7 percent to 55.2 million euros in the first quarter while profits from the domestic market slumped 57.7 percent to 46.1 million euros.

The bank has said it eventually wants to raise the contribution of foreign operations to 50 percent of its net profits from about 35 percent at the end of March. (Reporting by Shrikesh Laxmidas and Sergio Goncalves; editing by Axel Bugge and Karen Foster)

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