Consultant bagged €450,000 for assisting Novo Banco sale

A former secretary of State for the PSD government of Pedro Passos Coelho bagged the tidy sum of €450,000 for 26 months consultancy work between 2015 and 2017 advising and working on the sale of Novo Banco.

Reports Expresso newspaper, Sérgio Monteiro was working with the Bank of Portugal as a consultant on the sale. That year the troubled bank was sold to the US vulture fund Lone Star in a deal which has been heavily criticised ever since.
“The total value is €450,000, which over 26 months represented an average payment of €17,500 gross, multiple by 12 months in work that was not on contract,” said Monteiro in a parliamentary hearing into what has been going wrong financially and in management terms at the bank ever since.
The amount now revealed by the former BoP consultant is less than the €500,000 published on the public contracts site Base.
“There were some contracts that were not drawn up or carried out, or were reviewed downwards,” (in terms of payments) he said.
The monthly sum that was paid to Monteiro was the equivalent to the average he would have earned as director (and administrator) of the investment bank arm of Caixa Geral de Depósitos where he had worked before 2011 when he joined the PSD government.
Sérgio Monteiro said at the hearing that he had been head hunted by the banking authority and invited to have a chat with the then governor of the Bank of Portugal, Carlos Costa and by the administrator Hélder Rosalino who had been Secretary of State for Fiscal Affairs in the same government when Monteiro acted as secretary of State for Transport.
The discussions between the then governor of the bank of Portugal took place towards the end of 2015 after the central bank withdrawn from the sale of a 100% share of the Resolution Fund in Novo Banco in a process which ended up with three purchase offers fromAnbang, Apollo and Fosung but which did not satiny the central bank.
At the end of 2015 a new sales process began. “They asked me if I would be able to coordinate a team which had already been formed with the aim of selling (Novo Banco) in a manner to be decided later,” said Sergio Monteiro to MPs in the parliamentary hearing.
The sales process for Novo Banco which Sérgio Monteiro helped to supervise, was eventually completed with the sale of 75% of the bank’s capital to the US fund Lone Star in October 2017 for €0 but with a commitment from the fund to inject €1Bn into the bank.
Despite this cover of €1Bn, the sale went ahead with the creation of a contingency capital mechanism which paved the way for the Resolution Fund to put up to €3.89Bn to cover the losses from a specific group of assets for which Lone Star did not want to be responsible and the effect of these losses has had a negative impact on the bank’s capital ratios ever since.