While the fumbling Governor of the Bank of Portugal dithers over the Novo Banco sale, which may well expose him as the most expensive leader of Portugal’s central bank in its history, four new contenders have arrived on the scene to distrub his sleep.
These latest chancers are not interested in Novo Banco per se, but in buying up all the bad debts and non-performing loans held by Portugal’s high street banks – around €15 billion’s worth.
As reported yesterday, (click here) António Esteves, the fomer Goldman Sachs partner and current front-man for a consortium that includes a US fund called TPG, laid his offer in front of the Bank of Portugal and the government some weeks ago and only now has let his bid be known to the media, mainly due to a lack of response from the Portuguese.
As soon as Esteves went public, two more heavyweight US vulture funds have come clean and announced that they too are in the frame to snap up this impressive debt pile, thus doing us all a favour and releasing Portugal’s bankers to start lending to their friends all over again.
The other funds now revealed are Blackrock and Stormharbour from the US, plus a Portuguese group of bankers including Gonçalo Pires, who left Santander to prepare an offer and is associated with Luís Adão da Fonseca.
Stormharbour currently is advising Apollo on the acquisition of Novo Banco, which isn't going well.
The Prime Minister, António Costa, remarked nine months ago that he was looking at other ways to help Portugal’s banks which he considers hamstrung by bad debt and unable to lend to businesses in Costa’s bright new economy.
One alternative was to set up a massive ‘bad bank’ to take over the sector's banking debts but this has been fiercely oppposed in some quarters within the Eurocracy.
António Costa, in conjunction with the Bank of Portugal’s Carlos Costa, set up a team to negotiate with these big-hitters while Carlos Costa continues to oversee the Novo Banco sale process which has gone from bad to worse.
The two Costa’s do not see eye-to-eye on this deal, or any other, continuing their history of animosity.
The Bank of Portugal has been delaying progress and erecting barriers to offloading banking debts to one or more of these funds.
Citing regulatory and public impact, the Bank of Portugal governor has ensured that nothing much is happening, for 'if nothing happens, he can not make another mistake,' or so he might imagine.
The solution may be easy to achieve if there is a political will, but with the Bank of Portugal's governor content to do little and achieve less, the PM needs to sack him, and find someone who actually wants the job, not just the benefits.
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