Horta Osório, the chairman of Lloyds Banking Group, attended a breakfast meeting organised by the American Chamber of Commerce in Lisbon today and commented that Novo Banco is an attractive proposition due to its market share.
The banker said it was natural that several banks will be interested in buying the ‘good bank’ split off from the defunct Banco Espírito Santo, especially those banks which already have a presence in the country’s high streets.
"A bank that has 150 years of history, with fantastic employees who had the best relationship with companies in Portugal … and that has 15% of the Portuguese market is undoubtedly an attractive asset," said Osório.
"I think banks in Portugal, which have large positions but that are not dominant, have tremendous synergy with Novo Banco."
"Now, obviously, given the huge amount of capital that the bank had to receive, there will be a loss and I think the goal is to minimise this loss."
"The fact that the future of the bank is at present uncertain obviously does not help."
"A bank that had to remove its trading name due to contamination, loses an important asset."
"The situation is obviously very difficult. There were serious problems in BES that I hope are cleared up quickly because the Portuguese people deserve these problems to be investigated and that responsibilities are clarified."
On 3 August, the Bank of Portugal had to take control of BES after it declared a shock half-year loss of €3.6 billion.
Horta Osório’s former deputy at Lloyds, Eduardo Stock da Cunha, has taken over at Novo Banco after the unsurprising departure of Vítor Bento who had clashed with the policy of the Bank of Portugal to offload Novo Banco as soon as possible.
Bento was working on a medium-term plan to increase shareholder value. Interestingly, Eduardo Stock da Cunha is said to be of the same opinion as Bento after just a few days in post.
Comments
This is actually the crucial issue. Bank sites cost money - not just the staffing but the upkeep and maintenance.
Much day to day activity can continue to be shifted onto ATM's and the internet, supplemented by say a 'roaming bank site' in a truck with other agents in cars. Travelling round an area - continuing to show the Banks face, making appointments for negotiation and contract signing. So costs could be seriously reduced.
Another element is the extent of franchising in Portuguese banks. Surely hinted at in the Banif fraud trial which included a director as well as 2 managers. For director read 'owner'.
Major local families 'buying' the rights to use say - Credito Agricola as their banks name.