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Deloitte delivered on the morning of Tuesday, September 1, the audit it was carrying out on the management acts at BES and Novo Banco, for a period of 18 years, between 2000 and 2018, according to a statement released by the Ministry of Finance.
The analysis, which began in October 2019, was delivered to the Ministry of Finance after the deadline, which ended on August 31.
The Government will not be the only entity to have access to the audit since the Treasury clarifies that the document will also be delivered to the European Central Bank, Bank of Portugal, Resolution Fund, Insurance and Pension Funds and the Superintendency of Insurance. to the Securities Market Commission.
More than 13 points, the Ministry of Finance also says that the audit “covers a very long period of the activity of Banco Espírito Santo until 2014”, a period for which “criminal proceedings are in progress.” For this reason, and also due to “the need to safeguard the economic interests of the State”, the audit will be sent by the Government to the Attorney General’s Office.
Finance also indicates that the audit has already been sent to the Assembly of the Republic.
The document will show that Novo Banco’s losses were “fundamentally” due to exposure to assets “that originated in the period of activity of Banco Espírito Santo” – as reported by Jornal Economico last week – and that they were transferred to the balance sheet. Banco Novo after the BES resolution.
The total sample of the Novo Banco audit performed by Deloitte comprises 283 assets, which include loans, real estate, securities and transactions with subsidiaries that have generated losses covered by the Contingent Capital Mechanism (CCA). The sample will have covered 100 debtors and others that the Resolution Fund has decided to add to Deloitte’s scrutiny.
Regarding the analysis period of Novo Banco, between August 4, 2014 and December 31, 2018, Deloitte concluded that this credit institution incurred net losses of 4,042 million euros in 283 credit operations.
Three blocks of management acts of Novo Banco practiced in that period were analyzed. 201 credit operations were audited that generated losses of 2,320 million euros, 26 operations with subsidiaries and associates that caused losses of 488 million euros and 56 operations with other assets that generated losses of 1,234 million euros.
It is an “extensive” report that “describes a set of serious weaknesses and deficiencies in internal control in the period of activity up to 2014 of Banco Espírito Santo in the process of granting and monitoring credit, as well as in relation to investment in other financial assets and real estate ”, emphasize Finance.
As for Novo Banco, the report describes the “progress of the credit institution in these matters during the period of activity”.
The mandate assigned to Deloitte defined as the scope of the audit the characterization of losses and other equity variations between August 4, 2014 (one day after the resolution of BES) and December 31, 2018 and that caused calls of capital to Resolution under the CCA.
The audit is not limited to the period of losses, it also analyzes the operations from their origin and therefore covers the period from 2000 to 2018, as already reported.
The analysis covered the granting of loans, guarantees, restructuring, donations in compliance or execution of guarantees, sale of credit portfolios or transfer to restructuring funds; investment, expansion or divestment decisions made in Portugal or abroad; and decisions to acquire and sell assets.
(News update at 01:54 with more information on the content of the statement from the Ministry of Finance)
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