Lingering problems from last year's BES rescue are likely to have an influence in the choice of winner in the contest to buy Novo Banco.
For this reason, it is not only the price offered that will be taken into account as the Bank of Portugal decides on who will be the new Novo Banco owner.
This is the first admission by the Bank of Portugal that there are problems still to be resolved resulting from Carlos Costa’s decision to keep certain loans to BES at BES when the shattered bank was divided into two parts last August.
The current three companies on the short-list to buy Novo Banco, Fosun, Angbang and Apollo, have offered between €3 billion and €4 billion, way below the €4.9 billion needed to pay back the money advanced by the Resolution Fund from Portugal’s banks and the taxpayer.
Diário Económico today writes that the Resolution Fund is developing a new methodology, specific to the purchase offers so that the three proposals can be assessed.
Clearly having been briefed by the Bank of Portugal, the daily paves the way for Carlos Costa to play down the embarrassment of leaving the taxpayer and the nation’s banks out of pocket when he announces the new owner for Novo Banco at a price of a €1 billion or more under the magic €4.9 billion expected by the Treasury.
The briefing refers to ‘several lawsuits in progress’ subsequent to the botched rescue of BES, and other ‘unpredictable factors.’
The Bank of Portugal at last has admitted that 'there may be hundreds of millions of euros payable to creditors,' including Goldman Sachs, New Zealand’s state pension fund and 2,500 individual depositors, in legal processes that may drag on for years.
Under these circumstances, bidders for Novo Banco have gone in low and may not raise their bids as Costa had hoped.
These problems ‘will be taken into account’ when choosing the new owner for Novo Banco, says the Bank of Portugal which hopes to finalise the deal later in July.
Comments
Why has this only now been admitted to publicly ? Does it not illustrate so well the total absence of the notion of 'Duty of Care' in developing countries like Portugal ?
And why will we never be told about the 'lucky VIP's' who were warned to get their money out of GES / BES before it went bottom up ? Well shown by the lunches Tricky Ricky Salgardo (TRS) hosted in the months before the collapse with the President of the Republic and Prime Minister downwards. TRS going public on these to get the judge to back off !
So often the experience of other EU citizens in Portugal has been tarnished by Dishonesty. Cheating. Over charging. 'Smart' locals showing no comprehension at all of a 'Duty of Care'. Many tens of thousands of us have suffered from it !
And here we see it illustrated so clearly at the very highest level of Portuguese society .....in banking. The bedrock of the economy !