Novo Banco to close two more Algarve branches in July

Paul Rees 12 July 2018

novobancoshinylogo 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.

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Comments

0 #2 Ed 2018-07-13 19:17

Quoting Maxwell:

Ed: Any update on the bald headed geezer first put in at the head of Novo Banco? Was it the case that, working alongside all the ex-BES senior Management, like Salgardo's son and Espirito-Santo clan members, that the Bank of Portugal had allowed to temporarily transfer across - he saw how futile the whole exercise of saving BES/Novo Banco was? The ex-BES senior Management having re-obscured the billions via Nevis offshore accounts then leave for plum Bank posts elsewhere or a million euros a year pensions. But this reminds us all of all the other failed Portuguese banks that the Government rushed to temporarily support - just long enough to squirrel away the assets offshore. Then selling on the empty husks for cents per euro.

Vitor Bento is now Chairman of the ATM company SIBS (formerly he was its CEO); he is on the Boardof Trustees of the Catholic University and is a board member of PWN-Lisbon which seems to be a women's networking and mentoring group....

+1 #1 Maxwell 2018-07-13 17:19

Ed: Any update on the bald headed geezer first put in at the head of Novo Banco? Was it the case that, working alongside all the ex-BES senior Management, like Salgardo's son and Espirito-Santo clan members, that the Bank of Portugal had allowed to temporarily transfer across - he saw how futile the whole exercise of saving BES/Novo Banco was? The ex-BES senior Management having re-obscured the billions via Nevis offshore accounts then leave for plum Bank posts elsewhere or a million euros a year pensions. But this reminds us all of all the other failed Portuguese banks that the Government rushed to temporarily support - just long enough to squirrel away the assets offshore. Then selling on the empty husks for cents per euro.

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