[ad_1]
The president of Novo Banco, in an interview with the Business of the Week program of SIC Notícias, admitted that, taking into account the losses that the bank brings from previous quarters (until September it had losses of 853 million euros), the financial institution will have annual losses of more than one billion “in line with budget,” said António Ramalho.
The CEO of Novo Banco said that “this characterizes the last year of consolidation of the BES legacy”, which “by the way, was part of the framework of the agreements reached in 2017,” he reinforced.
António Ramalho declined to say how much Novo Banco will ask the Resolution Fund under the Contingent Capitalization Agreement (CCA), referring to the complex rules of the contingent capitalization mechanism. The CEC still has € 914 million to use.
The CEO of Novo Banco explained that in 2017 three scenarios were stipulated. A base that was scrupulously fulfilled until 2019; an adverse event that could be the case of the pandemic crisis and a very adverse scenario. In each scenario, capital needs were anticipated, and in the very adverse scenario this value is maintained through confidentiality clauses, in a state document that Ramalho admits can be requested by the Parliamentary Inquiry Commission.
António Ramalho spoke about the results of September, where the bank recorded losses of 853 million, influenced by three factors. First, 260.6 million euros, the result of an independent evaluation of the restructuring funds.
“They were assets that were in the bank’s possession since 2014 and that had a characteristic at the time of sale. [2017] that the revaluation should not be carried out before 2019 and constitute the respective impairments ”, explained Ramalho. In 2020 the bank independently re-evaluated these assets, and even asked for a second opinion that they are still waiting for.
On the other hand, the loss is due to 727.7 million euros of impairments and provisions, as a consequence of the stoppage of business in Spain (recognition of losses), and the worsening of the level of delinquency of some clients (credit to clients, guarantees and credit institutions), which are credits outside Portugal, with 187.2 million euros of additional impairment due to credit risks derived from the covid-19 pandemic.
Finally, Novo Banco also refers to an increase of 26.9 million euros in the provision for restructuring.
Regarding the parliamentary moderation to the injections of the Resolution Fund, he said that he had “the hope that Portugal will continue to be a country that complies with the commitments it assumes, either for Novo Banco or for TAP.”
The CEO of Novo Banco also mentions the report of the Court of Accounts to the General State Account for 2019, in which he states that Novo Banco represented 1,200 million euros in costs for the State, but recalled that they were 1.3 billion euros. cost with BPN, which is a bank that no longer exists.
In a balance from 2014 to 2020, the president of Novo Banco raises the question of whether the bank was worth saving. Ramalho believes that the bank was worth preserving. It was worth the sale to Lone Star, he said.
The bank’s chief executive does not expect to have to repay money after the future audit by the Court of Auditors.
Regarding the loan to Luís Filipe Vieira and the presumed forgiveness that will have occurred during Eduardo Stock da Cunha’s tenure as CEO of Novo Banco, António Ramalho says that “there was no forgiveness” of the debt of the president of Benfica, “at On the contrary, there was a reinforcement of guarantees (which to date were valued at 70 million) and the maintenance of all the personal guarantees that were on the table, but there was a credit restructuring ”.
Regarding the amount of “forgiveness” of 250 million euros, Ramalho explained that it was “real estate donations that were delivered to the bank before I arrived.”
The CEO of Novo Banco admitted, however, that other clients had some debt forgiveness.
Regarding the sale of the Benavente Golf course, which was sold for just over 400 thousand euros when it was valued at 4 million euros, Ramalho explained that the course had been in the bank for about seven years, when according to the rules of the Bank of Portugal it had not can retain. properties that have not been used for more than two years. “We put it up for sale and we had two proposals, one for 465,865 euros and the other for 450,000 euros. We sold what it offered the most, it was a transparent and open process, it had a impartial opinionIn other words, an international analyst who saw the valuation and agreed with the sale price ”.
“This golf course loses around 100,000 euros a year and why was it valued at 4 million in the bank? Because he had a lease and it was with a company that, objectively, for the rent paid, valued the countryside. But whose society was this [Greendraive]? It was 83% of the bank. In other words, the bank paid itself to value a property ”, said the CEO of Novo Banco.
The buyer of the golf course, which is an international entity, “could not resell and at this time it has already created a company to go and manage the golf course,” he said.
The two cemeteries in Brazil that were on Novo Banco’s balance sheet are also sold, confirmed Ramalho, who recalled that the bank had 5.2% of its assets in real estate with an average age of seven years, which is compared to CGD that I had. 2.2% or 2.3% more. “That is why it is part of the agreements with the European DG Comp to completely reduce our position and we have reduced by 55%. But do you know how many assets the bank had? It had 14 thousand assets. It was a state [que tem 17 mil ativos imobiliários] within the state, ”he said.
“The bank looked like a real estate agency with a bank incorporated,” Ramalho said to paraphrase Luís Máximo dos Santos, president of the Resolution Fund.
The bank has not yet sold the land at Rua Artilharia 1, which belongs to a fund that is 90% owned by Novo Banco.
Asked if he is sure that the sales he made were not made with related parties, Ramalho recalled that “in Portugal there is a law, which has a European framework, on the control of related parties and money laundering, and that determines that for instruments For collective use we need to know who is the last beneficiary. And when these instruments for collective use exist, you just have to know who has more than 25%, and the administrators of these funds are not considered to be the last beneficiary. And what happened is that they came to say that it is not known who has less than 25%, but I am obliged to know above 25% and forbidden to know below 20% ”. It was the deputies who defined in Parliament that the threshold is 25%, and that law was confirmed in August when this law was modified, he recalled.
“We took special care, which was to ask the Lone Star shareholder and who has a written commitment that they did not buy any troubled assets from the bank,” he said.
In the sale of GNB Vida, the president of ASF, an insurance regulator that evaluates the suitability of the buyer, came out to say that he knew all the last beneficiaries of the buyer, he recalled.
Ramalho accuses the “suspicion” of opinion formers and politicians that he considers “the critical disease of populism.
“The truth is exemplary, but the lie sells many copies,” said António Ramalho, citing a play on display, which he did not identify.
Future of Novo Banco
Resistance in the first three years; restructuring in the second three years and reactivation of the cycle after 2020, this is how Ramalho characterized the bank’s path since he assumed leadership.
DGComp’s commitment to the Portuguese state requires the bank to demonstrate its profitability in 2021, he said.
Novo Banco has 76% delinquent loans to pay regular interest, both on mortgages and loans to companies, the CEO said.
“The bank was the fifth largest bank with the highest (doubtful) delinquency rate in the European financial system, it was 33%, now we have an 8% rate. A job done with the capital of the Resolution Fund, Lone Star and bondholders ”, revealed the banker.
“Those who recapitalize the bank after 2021 are its Lone Star shareholders,” Ramalho said.
About him capital backingThe CEO of Novo Banco said that this clause exists only to save the bank if the restructuring fails, which “will not happen.” That clause ends at the end of the bank’s restructuring, he said.
António Ramalho remains as CEO of the bank 75% controlled by Lone Star until 2024.
[ad_2]
