A total of 17 companies registered their interest in buying Novo Banco before the deadline of 17.00 on New Year’s Eve.
The president of Banco BIC Portugal, Mira Amaral, warned today that now is not the right time to be opening the champagne, despite the government’s delight in the number of applicants and its fervent desire that the sale will be at the high end of expectations.
Amaral said that no conclusions should be drawn from the number of applicants as they have only applied for more information on the finances of Novo Banco and could withdraw at any stage.
Luis Marques Guedes, Minister of the Presidency and Parliamentary Affairs, said of the number of applicants, "It proves the good health of the financial system," and that the government is pleased with the process.
Guedes made a futile attempt to distance the government from the sale, saying that 'Novo Banco is a private bank so its sale is a process that has nothing to do directly with the government, but rather it is the concern of the supervisor, the Bank of Portugal.'
Novo Banco has €4.9 billion of capital and a €3.9 billion loan from the state. For the seller, the Resolution Fund, to break even it needs a bid of €4.9 billion - and for the cheque to clear.
The Bank of Portugal confirmed the number of applicants but declined to name them for reasons of confidentiality.
The companies that we know have asked for more details are Banco Português de Investimento (BPI), Santander, Fosun, Apollo, and Spain’s Banco Popular. There also has been formal interest declared by a group of business people under the name of ANANOB - 'Associação de Cidadãos manifesta interesse pela compra do Novo Banco.'
Before October last year Pedro Passos Coelho tried to persuade anyone who would listen that any losses on the sale of Novo Banco would not affect the country's accounts.
On October 9th he changed his tack, "If losses come into existence they will have to be supported by the financial system. The state owns Novo Banco and if there are losses then Caixa Geral will be affected,"
This followed an earlier admission by his Finance Minister Maria Luís Albuquerque that, far from being a matter that has nothing to do with the public accounts, if the sale price of Novo Banco is below the amount shovelled into the new bank the public accounts will be hit.
Both politicians spent August and September 2014 saying that there would be 'no losses for taxpayers' when Novo Banco is sold but this will only be the case if the bank is sold at a price in excess of its state and Resolution Fund loans, a price that many in the finacial industry say will be hard to reach, let alone exceed.
Passos Coelho sensibly has refused to speculate on the outcome of the sale of Novo Banco, patiently explaining that only when it is sold can we see the profit or loss.
Comments
Banking has depended since the dawn of currency entirely on trustworthiness.
How many of the Novo Banco staff knew full well that the Espirito Santo clan were up to no good over the years and ... said and did nothing ? Because that was the culture of the bank.
The Bank of Portugal would have swung into action ... or do we assume there is no 'whistleblowing' to the B of P possible ? That under the Portuguese Code of Honour any tip off would have been fed back to the Espirito Santo's to discuss how best to 'reward' this individual employed in their bank .
As in 'He's the wrong sort. Get him out. Clear his desk, now'
But we ask again - Having failed the Portuguese, European and World Bank regulatory authorities under BES - What use are these people in a new bank under new ownership ?
Can the world trust them ?