The 2008 collapse of Banco Português de Negócios (BPN) is still being supported by taxpayers with a further €420 million being set aside to cover losses and write-offs incurred in 2016.
BPN appears to have been run for the benefit of its crooked management. As those in charge were incompetent as well as criminals, the bank went bust in 2008, triggering a State bailout that so far, with this 2016 figure added in, has cost the public purse an eye-watering €3.66 billion.
Those responsible for massive fraud and corruption at BPN were sentenced at the end of May 2017: the former BPN boss José Oliveira e Costa (pictured) receiving a 14 year stretch after a long-running trial. Few are expected ever to serve time in prison due to their advancing ages and the byzantine appeals system of whcih they will take full advantage.
The bank quickly was sold off to the Angola's Banco BIC in 2011 for just €40 million after the government had thrown an initial €1.8 billion at the problem instead of letting the institution go under.
The cost of the politically convenient bail-out just keeps on rising, as do the running costs of State owned management bodies Parvalorem, Parups and Parparticipadas which were set up to sell the bank’s few remaining assets. Why there are three companies needed to run one collapsed bank has never fully been explained.
BPN was 'nationalised' on November 2nd, 2008, with the bank having suffered a €700 million loss, "from offshore, off-balance-sheet operations," according to the Bank of Portugal which arranged the bailout under its governor, Vítor Constâncio.
When BPN collapsed there was heated argument in Portugal's parliament as MPs said Constâncio had had the means to prevent the BPN collapse and that he did nothing.
After this disastrous performance as head of Portugal's central bank, in December 2010, Constâncio was appointed vice president of the European Central Bank, for an eight-year mandate, being responsible for 'banking supervision', a topic of which he had proven to have little grasp.
The case of BPN was particularly serious because of its size, market share, and the political implications.
Portugal's then President, Cavaco Silva, and some of his political allies, maintained personal and business relationships with the bank and with José Oliveira e Costa.
The result so far: managers at Parvalorem, Parups and Parparticipadas seem to have a job for life, nobody has actually been jailed and the unwitting public has been stiffed to the tune of €3.66 billion – and rising.