Novo Banco boss hits back at harsh parliamentary criticism

The President of Portugal’s Novo Banco, António Ramalho, has hit back after the leader of the opposition party PSD said that the hundreds of millions poured into the bank through a Resolution Fund was the “biggest white collar crime ever committed in Portugal”.

António Ramalho counters that it is “a shame that the bank is being used as political cannon fodder by political parties” and says he is “open to clarifying the situation but can no longer continue to stand by and witness the constant manoeuvres that can only harm the bank’s activity.”
At question is the €800 million of public money which poured into the Resolution Fund to prop up the bank’s liquidity position until it can be sold to another bank chain by 2021 and which has caused an outcry from MPs after it was discovered that the Prime Minister António Costa had not been informed of the cash transfer from the treasury by his own Finance Minister Mário Centeno.
Worse, the transfer was made even before the results of a fine tooth comb audit into the bank’s financial position has been made public.
The comments in parliament by the leader of the PSD opposition Rui Rio followed hot on the heels of those from the Finance Minister a week ago, in which he said the Resolution Fund was the “worst resolution fund ever carried out in the history of the European Union”.
The drip-drip of bad press resulting from political intrigues over the past two years puts the bank at serious risk of losing nervous depositors who could transfer their funds to other banks fearing that the situation of Novo Banco calls into question the safety of their savings.
Yet, in fact, the real situation of the bank’s recent results minus the toxic legacy it inherited from collapsed Banco Espírito Santo is not unfavourable and puts it in a similar situation to most of the other clearing banks in Portugal while its administration has worked hard over the past few years in clearing NPLs and toxic loans off its bank balance.
This week António Costs said that if the institutional audit carried out by Novo Banco should conclude that the bank had been “badly managed” then the Resolution Fund “had every right” to ask for the money injected into the bank to be returned.
But in a counter offensive, the bank states in a communique: “The Board of Directors of Novo Banco does not accept and deeply regrets that the good name of the institution continues to be used as political cannon fodder and/or political-media manoeuvres.”
The bank adds that it is certainly “one of the most scrutinised bank entities both nationally and at a European level because of the process that led to its being created” and adds that, “António Ramalho, its CEO, has already been various times to parliament to clarify questions that were put to him”.
And continues: “Novo Banco is available to clear up any doubts but cannot continue to stand by and witness the constant manoeuvres that only prejudice its activity and disturb the hard recovery efforts carried out by thousands of bank staff who daily serve hundreds of millions of customers, and forgetting the importance of Novo Banco for the country’s economy which is well evident, particularly at this time of difficulty for Portuguese companies and families.”