CGD bank bosses got massive bonuses despite ruinous accounts

 In News

The extent of profligacy which bought state bank Caixa Geral de Depósitos to its knees has been outlined in a damning report compiled by accounting multinational Ernst & Young.

In a “rogues gallery” of guilty faces plastered over Portuguese tabloid daily Correio da Manhã, seven Portuguese bankers have been named and shamed for allegedly overseeing 15 years of high-risk or even reckless loans which were rubber stamped by the bank despite risk assessments being unfavourable.

“A large part of these financings paved the way for huge bonuses lavishly paid out to CGD directors, in some cases causing the bank’s losses,” explains the newspaper.

The period of 2000-2008 in particular showed no evidence of the guiding principles of variable remuneration being applied while the years 2005-2015 outline a decade in which loans were handed out almost willy-nilly.

For example, percentages of credits that did not comply with “the way things should be” exceeded 67% and in some cases reached even 89%. As a result, ‘clients’ owing the most include property companies at Quinta do Lago in the Algarve (Birchview €88.8 million), Artlant (the Sines petrochemical plant, €350 million, Berardo Foundation, €267 million, Finpro (a concern that involved the now-deceased richest man in Portugal Américo Amorim, €114 million, Investfino (involving businessman Manuel Fino, and Metalgest (a company that used to be headed by Joe Berardo, who sold his position “allegedly” to wannabe Algarve oil baron José Sousa Cintra).

In other reports highlighting all the ruinous business, in 46 financings rated medium to high risk, CGD conceded almost €3Bn in credit, of which €1.2Bn had bee written off as a loss in the bank’s accounts of 2015.

Ernst & Young’s report was compiled over a year ago and revealed on live TV by political commentator Joana Amaral Dias.