António Ramalho to leave Novobanco in August

The president of Novobanco, António Ramalho, has announced to the bank’s supervisory board of directors that he will step down in August but will remain on as a consultant.

The news was broken by the business newspapers Jornal de Negócios and Jornal Económico on Thursday after he made the announcement.
“The CEO of Novobanco, António Ramalho, informed the General Board of Supervision (CGS) today of his intention to step down from the executive roles which he currently performs, in August, and will support the handover process to his successor”, states the bank in a communiqué released on Thursday afternoon.
“After having led the bank to consolidated profits over four consecutive quarters, as well as overseeing the bank’s return to the capital markets, and launching a new brand and new business model, António Ramalho believes this to be the right time to pass the baton to a new CEO who will lead the bank in the future”.
Over the past eight years no banker has received so much media attention in Portugal as António Ramalho usually for the worst of reasons, although to be fair, few of them as a result of his leadership or actions at the bank.
His tenure, which began in 2016, included the continuing fallout of the collapse of Banco Espírito Santo from which Novobanco was created in 2015 in a highly undercapitalised state which required the bank to draw on several billon euros of money from the government and the other banks through a resolution fund set up to support three banks after the end of the financial and sovereign debt crises. (2007-2014).
The resolution fund is backed by all Portuguese banks which paid annual contributions to finance it. The also had access to loans from the state and banks. Almost all of the monies injected into the bank was financed by the State and guaranteed by taxpayers.
In May 2021 the Tribunal de Contas (which deals with Portugal’s public finances) published an audit report where it estimated that the Portuguese tax payer financed the bank by up to €10.8Bn.
The majority shareholder in Novobanco is Lone Star which had acquired the majority stake in 2017, with the sale contract stipulating that the Resolution Fund must inject up to €3.9Bn euros in case of losses on the sale of some toxic assets inherited from collapsed Banco Espirito Santo.
Over the past few years Novobanco has also successfully offloaded several portfolios of non-performing loans (NPLs) including Project Harvey (€640 million acquired by Deva in 2021) and Natas II (€1.7Bn) by Davidson Kempner), Project Orion (€200 million), among others.
The bank’s boss was also called to a parliamentary inquiry into big ticket reckless loans made by BES and other banks such as Caixa Geral de Depósitos over a decade ago which the bank inherited and left a black hole in its balance sheet.
More recently, António Ramalho was cleared of any meaningful involvement in an alleged preferential treatment given to Luís Filipe Vieira, former president of football club company Benfica SAD and one of the big ticket debtors to Novobanco.
António Ramalho’s professional conduct and ethics was also be investigated by the European Central Bank.
The capital calls from the contingent capital mechanism has also proved a headache for the Portuguese government. Despite the bank having registered a €184.5 million profit for 2021, the first positive results since the bank was created in 2014.
The bank requested a further €209 million from the Resolution Fund which was opposed by the fund and the outgoing minister of Finance, João Leão.
The equity fund Lone Star which owns Novobanco has said it will use to services of the international headhunting consultancy Korn Ferry to select the new CEO of the bank.