Novo Banco sale sealed by mid-2015

Page created: Tuesday, 18 November 2014 9:16 GMT

Bank of Portugal  BES   Sale

Novo Banco, the financial entity emerging out of the collapse of Grupo Espírito Santo, will have been sold by the middle of next year, Carlos Costa, the Governor of the Bank of Portugal, told a parliamentary commission that sat Monday to begin its analysis of the circumstances surrounding the aforementioned financial collapse.

Costa explained that non-binding offers would be elicited in the first semester of 2015 with the binding proposals due sometime shortly after April with “indications that there are interested parties.”

Should the Novo Banco solution involve the means of guaranteeing the “necessary concession of credit” for example, the Bank of Portugal governor said the economy would have “side-stepped a storm.”

Costa went onto not only guarantee that the disposal of Novo Banco would display “transparency, security and stability,” with the European Commission also supervising the process, but also gave some details on the immediate run-up to Grupo Espírito Santo imploding following the reporting of a €3.6 billion loss by the group’s bank BES in August.

Costa said that the authorities had engaged in “authentic arm-wrestling” with group president Ricardo Salgado over the nomination of his successor.

Whilst Salgado wanted to name Amílcar Morais Pires with Costa stating how the authorities had stepped in to prevent this happening without the backing of a majority of the bank’s shareholders.

That process ended up seeing Vítor Bento, then President of the financial services provider SIBS, being nominated as a consensus based candidate with Crédit Agricole providing majority shareholder backing with Costa stating that the regulatory authorities had correspondingly met their supervisory requirements.

The parliamentary commission has a 120-day period, subject to extension, to ascertain the management practices in effect at BES, the role of the external auditors, the relationships between BES and the wider group and the methods deployed by BES to finance these activities as well as broader issues relating to the functioning or otherwise of the financial system.