By the end of July, Novo Banco will have closed another 36 branches as it races to beat targets, negotiated with Brussels, four years ahead of schedule.
The Algarve is to lose branches in Olhos de Agua and São Brás de Alportel with the Beja district losing only one - in Vila Nova de Mil Fontes.
António Ramalho, the bank's CEO, has sought to accelerate the closure programme this year to reduce the network to 400 branches by 2021 - he may achieve this by the end of 2018.
Novo Banco ended 2017 with 473 branches. In April, the institution had closed 35 branches. With this month’s closure, management will have shut 71 branches so far in 2018, ending up just two branches short of the 400 branch target.
Both employees and customers have been informed of these latest closures and no employees will be fired as there are enough people retiring this year or taking the generous early retirement package on offer, to cover the required 440 headcount reduction.
Many workers will have to be shifted to other branches but if this means demotion, they will keep their old salary package.
The shrinking of Novo Banco follows the agreement with the European Commission prior to the controversial sale of the bank to the US vulture fund, Lone Star, in October 2017.
The US fund has 75% of the bank that was born from a mishandled Bank of Portugal ‘resolution’ to the problems at BES which went bust in August 2014. The remaining 25% of the shares were left with the Resolution Fund which has had to call on taxpayers to meet it liabilities after a 2017 loss at the bank of an eye-watering €1.4 billion.
The Resolution Fund had to inject a further €792 million into Novo Banco, having already pumped in nearly €5 billion when Novo Banco was created. Taxpayers had to lend €430 million of the €792 million to cover losses and keep the bank operating legally.
Detail in the document on which Brussels based its approval of the 75% sale of Novo Banco to Lone Star, shows the Catch 22, that if a further injection of public funds is needed, the bank will have to shrink its branch network even further with up to 120 branches at risk of closure and 1,100 jobs at risk.
See also: 'Novo Banco to shut down another 30 branches by the end of July'
