The Bank of Portugal announced on Sunday 3 August 2014 that it applied its powers under the Decree law No 31/2012 of 10 February 2012 (the "Resolution Law") to split Banco Espirito Santo ("BES") into a "good bank" and "bad bank" (the "Restructuring") and to transfer certain of BES "good" assets and liabilities to "Novo Bank".

Following the release by BES of its half year results, it was apparent that the financial stability of BES was more questionable than many had suspected. A rapid decline in BES’s share and subordinated bond price followed and on the weekend of 2 and 3 August, the Bank of Portugal must have come to the conclusion that its earlier plea for a private sector recapitalisation was unrealistic. On 3 August, the Bank of Portugal publicly announced the split which left certain assets with BES, which also retained the subordinated debt. The senior bonds and many of the quality assets of BES were transferred to Novo Bank.