Government seeks €886 million spend with BPN and Banif

 In News

The Portuguese Government is to ask parliament for permission to authorise and expenditure of €885.8 million to spend on Banif and BPN.

Within the State Budget of 2019, the Ministry of Finances wants to spend €337 million on three structured investment vehicles for Banif and €548 million on the three subsidiary companies that exist in the second.

The amount is significant — around 0.5% of Portugal’s GDP and is more than the amount that would be spent on “defrosting” public sector workers’ career scales — representing a u-turn of 13% (€131 million) against the amount spent this year on such financial vehicles.

BPN (Banco Português de Negócios) used to be a private bank, but was nationalised by the Portuguese government in 2008 after mis-management and malpractice resulted in debts of €1.8Bn. Several irregularities were uncovered at the institution in 2011.

BPN, stripped of many of its debts and bad loans, was sold to Angola’s Banco BIC for €40 million.

The largest of these funds, Parvalorem (a fund which manages the remaining loans from BPN) will absorb €409 million in 2019.

The second largest fund is Oitante (which holds the assets of Banif that Santander, which took over the bank in 2015, was not interested in buying) which implies an expenditure of €322 million.