Portugal’s hapless taxpayers already have been forced to stump up €18 billion to help save the nation’s banks and there’s more pain to come.
Most of the money already has been lost as the State saw fit to nationalise, sell off or liquidate banks at vast losses in the investment.'
Between 2008 and 2017, the State spent €16.7 billion on support for banks.
In 2018, the sum grew by €932 million with the transfer of €792 million to Novo Banco, under the insane sales agreement organised by the Bank of Portugal, (Governor Carlos Costa pictured above) and €140 million loaned to the fund that will pay out to those ripped off in the BES scandal.
It’s not over yet as taxpayers are liable for another potential €5.5 billion as they have provided guarantees to companies in the BPN universe (€2.2 billion). There also are guarantees resulting from Banif (€556 million) as part of the solution found for BES victims (€153 million, after the €140 million down payment,) the list continues.
In 2018, €792 million was transferred to Novo Banco as part of the deal where Lone Star gets the bank and taxpayers pick up any non-performing loan problems.
In 2008, BPN hastily was nationalised and then sold to the Angolans for €40 million while taxpayers took over the toxic assets. So far, more than €4 billion has been put into BPN, but the final bill may be close to €6 billion if it is not possible to recover assets. In 2019, the bank will receive €548 million and the liability remains open.
In BES, which went tits up in August 2014, was sold at the end of 2017 but not until €4.9 billion was pumped into the bank by the Resolution Fund. At the end of 2017, the bank was ‘sold’ at zero cost to the US Lone Star Fund, which recapitalised it with €1 billion and agreed with the Bank of Portugal that taxpayers will be liable for a further €3.89 billion. Then there’s the various court cases taken out by disgruntled investors, liability unknown.
In the case of Banif, sold to Santander Portugal for €150 million at the end of 2016, the bank was tidied up with more than €2.2 billion of taxpayers' cash. By 2017, the money injected into Banif amounted to about €3 billion.
Then there’s Caixa Geral de Depósitos at €4.9 billion and counting.
So it goes on and on, until we come to the conservative figure of well over €20 billion thrown at the banking sector, not much of which will ever be seen again.
Comments
Repaid? You joke, of course. (Sadly)
This seems to be happening as is described in the report. Unfortunately these loans have to be paid as not to do would result in further finance been curtailed and this would be disastrous for a country that is preparing for further development.
HMM
Why would they want to stop Peter. Back handers all round. Its a feeding frenzy at the cost of the tax payer..
Also on Wolf Street, regarding Italian banks: https://wolfstreet.com/2019/02/03/italy-glass-steagall-type-law-to-break-up-banks-cut-bailout-costs-for-taxpayers/
Then factor in the EU Banking Backstop - Germany and the troubles of its flagship heavyweight Deutsche Bank in holding tens of billions of Italian Debt as well as a host of other weak EU countries sovereign borrowings. EU Banks average value dropping by a jaw dropping 75% since 2007.
Check out Wolf Street ... https://wolfstreet.com/2018/12/20/deutsche-banks-death-spiral-hits-historic-low-european-banks-follow/
The €792 was the 2018 figure. This year the amount should be over €800 million shovelled into this private company
Why is it that none of these banks is allowed to fail? Why must they be supported?