The recapitalisation of Caixa Geral de Depósitos now will take place in 2017 to keep the effects of the capital increase from showing up in this year’s national accounts.
The postponement already has been authorised by the European Central Bank, with the first part of the recapitalisation planned for this year to take place in the first week of 2017.
At stake is the conversion into capital of €900 million in CoCos, plus interest accrued and the transfer of 49% of Parcaixa to Caixa Geral.
These two operations will increase the bank’s capital by at least €1.428 billion and will be followed by an injection of €6 billion - the original €2.7 billion figure now just a distant and hugely optimistic dream.
By moving these events into next year, they will take place under the new management as the discredited CEO, António Domingues' leaves on the last working day of the year.
Operation ‘Harmónio,’ aims to wipe out years of accumulated losses - incurred due to mismanagement and corruption as well as a downturn in trading after the 2008 financial crisis.
The European Central Bank and the Bank of Portugal both agreed ay the beginning of December that Caixa Geral can go ahead to reduce its capital to cover mounting losses but the effects on this year's public accounts would have been too embarassing, hence the move to 2017.
The public is still waiting for a full report into the last ten years of mismanagement at Caixa Geral, which directors can be blamed, which can be charged how were successive government able to downplay the increasing problems at Caixa Geral.
The last finance Minister, Maria Luís Albuquerque said she was ‘shocked’ at the state of the bank after the Court of Auditors reported in early December a disastrous "lack of control" between 2013 and 2015 when she was in charge.
With recapitalisation of the State-owned bank and a new management team under Paulo Macedo, the public expect Caixa Geral's problems to be resolved and for the bank to be run as a bank, not as the directors' personal money tree.
Comments
In any case, as often commented on - Portugal's problems in every sector stem from the heavily outnumbered good European Portuguese passively accepting, due to having zero confidence in their Judiciary, the wrongdoing by the far more numerous 'Afro-Portuguese' swirling round them.
Is it not wishful thinking that there are any good Portuguese that will step forward and denounce wrong doing as an end in itself rather than, as with ex-PM Socrates case, just stirring as a bad loser because Lena Construction had got too many contracts during Socrates time in power.