Portugal’s Finance Minister, Mário Centeno, continues his attempt to play down the situation at Novo Banco as the privately controlled business heads towards its maximum State guaranteed capital borrowing limit of €3.9 billion.
Centeno claims that, "Not one euro of Portuguese taxes" is being used to bail out Novo Banco and that contributions from other banks, through the Resolution Fund, will reimburse the State at some future point.
In an interview with RTP, the finance minister's twisted logic was that, "in the future, the Resolution Fund will pay back this loan to the state, over 30 years, with contributions from the banking sector and that because loans to Novo Banco do not interfere with the State Budget, it does not make sense to argue that this money could be used in other areas of society and the economy.”
As for Novo Banco holding the ‘good assets’ of the failed BES, Centeno admits this is nonsense and never happened, despite this being the sales pitch by the Bank of Portugal's governor in 2014 when the BES bailout was arranged with unseemly haste and duplicity.
In 2016, PM António Costa and Mário Centeno - with a decisive role played by €30,000 a month "consultant" Sérgio Monteiro, a former Secretary of State under the Social Democrats – assured everyone that the €3.89 billion total facility would only be used by Novo Banco 'in an extreme scenario' – since which the bank has been drawing down capital to the fullest extent it can get away with.
Centeno argued that "today, this latest (€1.149 billion) injection of capital into Novo Banco will be made, in part, by borrowing from the State," but, "it is not the State that is injecting money into the Bank, it is the Resolution Fund - that in future will repay this loan to the State over 30 years with the contributions of the banking sector."
"This is not to say that we do not understand that there is a significant loss here for the Portuguese economy," says Centeno, which is why he considered it "indispensable" to carry out an audit of the bank's bad debts, a politically inspired move to show that he is doing something about the rapid drawdown of capital funding demanded by Novo Banco, even though this facility was part of the sales agreement.
It seems strange that the banking sector’s four largest banks showed 2018 profits ranging between €300 and €500 million while Novo Banco closed 2018 with a loss of €1.4 billion as it wrote off anything that even smelled of default.
Portugal's high street banks, that have to pay in to the Resolution Fund, would prefer not to be supporting one of their competitors in creating a less than level playing field by shovelling money into a seemingly bottomless pit.
Comments
HMM.
I am sure your money is in good hands with Mr Costa and friends..
Now, that bank is making a measly profit of 1.5 billion and a lot of people think it's great, well it is not, considering that Britain has a population of 60 million people.
British society is being stretched to breaking point, schools don't have enough funds to buy text books or equipment, hospitals are struggling to meet the needs of it's patients, a larger number of British people are now using food banks, (even people who work full time) as rents and mortgages payments have rocketed. libraries and municipal sport facilities are closing their doors to people that need this space, like OAPs, students, unemployed and children.
And all because the government is looking after the needs of the banks and financial sector and not the needs of the ordinary British people who work to pay their taxes, so that these facilities will be available to all.
So, please take a good look at your own country, is it really looking after the needs of it's citizens "any better" than Portugal... I think not.
BBC News - RBS bailout 'unlikely to be recouped'
http://www.bbc.co.uk/news/business-45500384
Wikipedia also notes that, 'However, only £400 billion of this was 'fresh money', as there was already in place a system for short term loans to the value of £100 billion.'
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According to wikipedia the British government poured £500 billion into the RBS in 2008.
HMM.
Who knows , but 1.5 billion profit year ending 2018 is a dam good start compared to the bottom less pit going on here..
The British government pumped £45.4bn into RBS. Even if they are making "good money", it is unlikely that the government will ever recover its investment.
Hmm.
My point is RBS is now making good money..
Every country in the developed world was affected by the banking crisis that followed the lehmann brother's financial crash.
HMM.
The difference is RBS shows a 1.5 billion pound profit year ending 2018. You need to put them all together here to see that..