The European Central Bank will complete its review of Novo Banco in November this year in a far-reaching process which is described as "an analysis of asset quality and a stress test."
The ECB said the European assessments carried out in 2014 examined the financial health of 130 banks but that this was before the ECB took over the EC’s banking supervision functions.
Of the 130 banks that underwent a joint assessment by the ECB and the European Banking Authority last year, 25 failed with a cumulative shortfall of €25 billion with Italy the most affected as nine of its banks were lined up for criticism.
The Portuguese Commercial Bank (BCP) was the only one of the three Portuguese banks examined that failed the full stress test, with Caixa Geral de Depósitos and Banco BPI both passing the exam.
Novo Banco’s stress test was postponed in 2014 as the bank had only just been created in the aftermath of the BES collapse. It is likely now to fail and the bank’s Chief Executive Stock da Cunha has announced a massive sell-off of seized property and non-core shareholdings to release cash and bolster the bank’s capital.
Europe’s banks now are supervised directly by the ECB but only if the total asset value of the institution exceeds €30 billion or 20% of the host country’s gross domestic product.
A new bank is on the point of being launched as Banco CTT now has obtained Bank of Portugal permission to operate.
Portugal’s ‘Post Office Bank’ has now got all the bits of paper necessary to take deposits and operate in competition with other high street banks - with the added bonus of a high number of potential customers already using its premises.
The Bank of Portugal said that the company's "completion of the special registration" has been accepted and the Securities Market Commission (CMVM) has been made aware of progress.
Bamco CTT aims to open before the end of the year and to offer low-cost banking services, especially to the tens of thousands that are denied traditional banking facilities.
