Montepio bank faces €30 million fine from Bank of Portugal

Portugal’s Montepio bank faces huge fines of €30 million from the Bank of Portugal for alleged infractions.

The mutual bank which made a timid profit of just €12.6 million in 2018 after years of staggering debts, has been accused by the central bank supervisor for blagging on regulations.
However, Montepio says that the fines could end up being much less and believes it stands a fighting chance, either wholly or partially, in getting many of these alleged infractions cancelled.
Moreover, it says that for some of the infractions for which it is under investigation, “The Bank of Portugal has made decisions in a summary or simplified procedure for which it has proposed a hefty one-off fine but one that is substantially less than the potential maximum fine.
In other cases under investigation, which are still in the preliminary phases, since no proofs of infractions which were requested from the Bank of Portugal by the defendants, but which have not been presented, are forthcoming, this will substantially limit the risk analysis.
Nevertheless, in these cases, Montepio claims to have “serious and reasonable” lines of defence, both in terms of factual support and within a legal framework for most of the infractions of which it stands accused.
Montepio stresses that there “still exists a risk of being found guilty” but says that in the case of some of the infractions the potential fines are covered by provisions.
In March the bank was the target of a fresh legal case brought by the supervisor, resulting from a case opened in 2017 and from which it risks getting a hefty fine of up to €10 million (on top of the possible €30 million from the end of 2019).
This refers to an administrative procedure regarding 11 alleged violations of the calculation rules governing own funds and the provision of periodic information.