Bank boss José de Matos has admitted that past 'over enthusiasm' at the bank has so far cost the bank’s shareholders a cool €1 billion, €348 million of it in the last financial year.
The 2104 figure was 40% down on the year before as write-offs bit deep into the banks trading figures and the president of the bank said that the biggest mistake last year was loans to companies in the Espírito Santo Group, but he did not quantify this mistake.
The collapse of the Espírito Santo empire was the main reason for provisions rising to €949 million. José de Matos said that loan interest payments were received from Espírito Santo companies in May, June and July last year but “then things become complicated."
The bank is reducing staff according to plan, "We will try to speed up the reduction process through early retirement," said José de Matos. Last year, the bank shed 232 people, mostly through retirements.
"We hope to continue to downsize because this is needed. It will be done with great tranquility," added the president of the state-owned bank as he presented the less than tranquil 2014 results.
Caixa Géral de Depósitos also has an ongoing reduction programme for branches, down to a slimmer 726 units by the end of February.
The reduction in staff numbers and the closure of branches were commitments made by the bank as part of the restructuring plan approved by Brussels when the Portuguese government rescued Caixa Géral.
A further worry is that the bank is a participant in the resolution fund that owns Novo Banco, a fund which runs the risk of losing money if the Novo Banco sale is for a sum below the amount that was injected.
