14 November 2019 – Novo Banco’s request announcement that it would request another capital injection from the Resolution Fund has strengthened calls from Portugal’s parliament for a major audit of the financial institution. The bank has yet to announce the size of the needed injection from the contingent capital facility. However, the bank’s results from the first three quarters of the year point to a figure of around €850 million. A injection of that size would extend the total needed transfers to Novo Banco to €3 billion.
The Government, after pressure from the Parliament, has commissioned Deloitte to conduct an independent audit to assess the bank’s actions in regards to the assets it inherited from BES. The scope of the special audit will cover credit operations, including the granting and guaranteeing of loans, debt restructuring and write-offs, the execution of guarantees, sale of credit portfolios and transfers to restructuring funds. The audit will also cover investment, expansion and divestment decisions made in Portugal and abroad; including decisions covering asset acquisitions and disposals.
So far, the Resolution Fund injected €1.149 billion this year (to cover losses of €1.423 billion in 2018), in addition to €792 million last year (to cover losses in 2017), totalling 1.941 billion euros.
Last Friday, the bank's results continued to worsen, with losses in the first nine months of the year increasing from €390.9 million to €572.3 million. According to a statement by the bank, Novo Banco posted losses in the first nine months of the year relating to the “restructuring process and deleveraging of non-productive assets, namely the Sertorius project, the Albatross project, the NATA II project and the sale of GNB Vida.”
Original Story: Público
- Pedro Ferreira Esteves
Photo: Rui Gaudêncio
Adaptation/Translation: Richard D. K. Turner