Tensions at NB assembly

 In News, Novo Banco

The CEO of Novobanco, António Ramalho, decided to leave his post in August after strong and hostile criticisms of the way he has run the bank recently.

It turns out he may have resigned after what has been called a “tense meeting” of the bank’s general assembly.
The meeting resulted in the government, which owns a 30% share in the bank, rejecting the annual financial accounts, while the Resolution Fund which was set up to finance the bank slammed fat cat director bonuses, refused a capital injection of over €200 million, and demanded a full report into the institution’s deficiencies.
According to the newspaper Expresso the meeting held on March 25 was full of “accusations, criticisms and barbed remarks”, while the Resolution Fund representatives launched an attack on António Ramalho’s “management choices”.
Although the Government does not own the bank — 75% is held by US equity company Lone Star – it had representatives at the meeting because it is a direct shareholder.
On 31 March António Ramalho announced that he would quit his job managing the bank in August. It is not clear now whether the decision was taken because he had had enough of the criticisms, was pushed to resign, or simply ha already made the decision given that Lone Star plans to privatise the bank in 2023.
According to Jornal Económico it is now said that Lone Star is considering appointing the bank’s current CFO Mark Rourke to the top job. The bank will have until mid-May to put forward a candidate for the European Central Bank’s approval.
The same newspaper said that Lone Star has also hired a headhunting company, Korn Ferry, to assist in recruiting a new CEO to lead the bank which has been mired in controversy since the day it was founded from the embers of collapsed Banco Espírito Santo in 2014.
It is expected that Novobanco will be sold in 2023 but Lone Star is keeping tight lipped about any possible interested parties or future intentions and choices for the new CEO.
Novobanco is said to have required over €10Bn in Portuguese tax payers, Portuguese State and banking system money to keep afloat since 2014. It is widely accepted that Novobanco was seriously undercapitalised from the start, which seriously hamstrung its activities and development. The bank did finally make a €184 million profit in 2021, but than caused public outrage after asking for over €200 million from the Resolution Fund.