Novo Banco, waiting to be sold a new owner, has reported further losses, €359 million to the end of September.
Banking income has improved, cost have fallen and tax credits helped stem the trading losses but further provisions against bad debt wiped out a trading gain of €3.7 million.
The write-offs after two years of activity continue to increase through the year, "The amount allocated to provisions amounting to €762.2 million which represents an increase of €298.3 million over the same period of 2015, continuing the consolidation effort of the New Bank," reads today’s depressing trading report.
Novo Banco was set up by the bank of Portugal with assets and liabilities considered ‘healthy’ by the failed Banco Espírito Santo which collapsed in August 2014. The definition of 'healthy' continues to elude those in charge.
Another of Portugal’s high street banks, Millennium BCP, also has reported losses, €251 million in the first nine months of the year compared with a €264.5 profit in the same period last year. Bad debt provisions of €400 million year-to-date show the state of the bank's loan book.
The Governor of the Bank of Portugal, Carlos Costa, said today that Novo Banco is very important for financing the economy.
Costa was attending a conference at the University of Évora, at which he was asked about the sale of the bank, but merely affirmed that the process "is in progress".
"What I can say is that it is a very important network in terms of financing the economy and small and medium-sized enterprises", and this role "is well understood by all those who know the Portuguese economy and the financial system," waffled the country’s leading banker who spent time trying to persuade the audience that intervention with failing banks is socially and economically preferable to allowing a bank to go under.
