Novo Banco owed €5.5Bn by big ticket debtors

Novo Banco closed 2019 with 35 big debtors in a position of default on their loans.

All of these big borrowers have generated losses of over €5.5Bn to the bank led by António Ramalho who looks set to again be put forward as the bank’s CEO when his mandate ends at the end of this year.
Most, if not all of the debts, were inherited from the winding up of Banco Espírito Santo (BES) which collapsed in 2014.
Each year, as a result of public funds injected into the bank from the Resolution Fund, the Bank of Portugal has to publish a list of clients in default, but because of confidentiality can only mention them by an allocated number and how much they owe.
At the end of 2018 there were 36 large economic groups whose debts to Novo Banco were greater than €43.3 million and were in default.
According to data presented by the Bank of Portugal there were 35 big ticket debtors owing to the bank by the end of 2019.
However, despite the reduction in numbers, the amount of debts went up from €4.1Bn to €5.5Bn owing to the bank.
And while most of the debts were inherited from BES, there are lots of debtors, all identified by numbers, whose losses have more than doubled over the past 12 months.
It means that Novo Banco’s negative balance has got €1.4Bn worse, partly because of one big debtor referred to as Client 130 which generated a loss of €2.9Bn alone. This debtor, because it is not a private individual, is known – BES Angola.
Meanwhile, the man whose unenviable task it has been over the past few years to take the flack from a torrent of press and public fury, António Ramalho, is being put up to have his mandate renewed at the helm of the bank.
Byron Haynes, President of the General and Supervisory Board told the weekend newspaper Expresso that Ramalho has his 100% full support and that of the main shareholder Lone Star.
It also emerged this week that Novo Banco lent €60 million to the buyers of its former insurance arm GNB Vida.
The bank says that the sale operation included a “buyer’s loan” which corresponded to 50% of the final price that Apax paid for the insurance company, which was €120 million.
The sale operation of the insurer to GBIG Portugal which is totally held by funds managed by Apax “included a concession of a vendor loan corresponding to 50% of the sale price at current market interest rates” stated the bank on Wednesday at a press conference.