With the sale of Novo Banco still not settled, its boss Eduardo Stock da Cunha (pictured) is to move back to London in September, leaving behind as much uncertainty and disruption as when he took over.
The loss-making Novo Banco must be sold by August, according to the government's own timetable, and “at no loss to the taxpayer”, according to Prime Minister António Costa.
One financial move that may now remain in place is the €2.2 billion in debt obligations held by Novo Banco that were switched by the Bank of Portugal to the burnt out shell of BES to make Novo Banco more attractive to potential buyers.
Even this controversial move, which has triggered several court actions by disgruntled investors such as Merrill Lynch, seem not to have done the trick as buyers for Novo Banco are thin on the ground despite a promise by the Chinese that the bank "would be bought by a Chinese buyer."
As BES was forced to take on the €2.2 billion in debt obligations transfered from Novo Banco, the 'bad bank' reported a year end loss for 2015 of a staggering €2.6 billion.
The institutional investors which lost the €2.2 billion, courtesy of the Bank of Portugal, learned yesterday that the Administrative Court in Lisbon judged the debt transfer as legitimate.
The High Court in London may have other ideas as Goldman Sachs and others have lodged similar actions against the Bank of Portugal in the UK capital to recover their clients’ money.
The shell of BES is due to finish being a bank in August and currently has just seven employees costing €1 million a year, plus the inevitable team of 'consultants' costing a further €4.6 million.
Stock da Cunha at Novo Banco has failed to reduce staff levels by anywhere near the agreed 1,000 yet has drawn the ire of unions by forcing redundancies on unwilling recipients. Novo Banco has remained loss making under his management yet sale of the bank this summer needs to raise at least €4.9 billion to repay the Resolution Fund and the taxpayer which between them bailed out the collapsing BES in 2014.
The first appointee to run Novo Banco, the ‘good bank’ created from the BES wreckage, was Vítor Bento whose reign was short lived as he concluded early on that selling Novo Banco for a price that could repay its founders was a medium to long term operation.
Bento resigned in September 2014 as a panicky Carlos Costa at the Bank of Portugal demanded a quick sale to save face. Bento was forced out and Stock da Cunha appointed.
Quite how Stock da Cunha will enter details of his time at Novo Banco on his CV remains to be seen. His failure was almost guaranteed as during his tenure, Novo Banco was never going to be worth anything like the sum pumped into it by the Bank of Portugal's Carlos Costa, even after Costa managed to vapourise €2.2 billion in a move that sent shocked international investors back to their city offices.