Banco de Fomento: still no chair

 In Bank of Portugal, Banks, News

The Bank of Portugal is said to be running out of patience for a new chairman to take the helm at Portugal’s new development bank Banco de Fomento.

A year ago the Government tried to find a candidate to act as non-executive president of the bank which will distribute and lend funds to companies on the back of Portugal’s €16Bn Resilience and Recovery Plan to modernise their digital infrastructures, begin their energy transition processes and generally become more competitive and export-orientated.
However, the Minister of the Economy, António Costa Silva, who was also charged with being Portugal’s ‘recovery tsar’ by the Prime Minister, António Costa, and who helped identify the key areas where Portugal needed to modernise, said it was difficult to attract the right person for the job given the salary package on offer.
Now the Bank of Portugal which supervises the banking system in Portugal has given the government one month to find a suitable candidate.
The new bank has not had a non-executive chairman for one year after the preferred candidate, Vítor Fernandes had his name removed from the list because of questions that he may have facilitated loans at extremely advantageous conditions for former Benfica football boss Luís Filipe Vieira when he was a director at Novobanco and which consequently could have lost money for the bank in question.
Vítor Fernandes name was mentioned in Public Ministry documents as part of an investigation called Operation Red Card involving corruption over football player transfers, although the case involving losses to Novobanco were to do with a pharaonic property project in Brazil that went sour during the economic crash.
The ex-president of Benfica had invested €120 million in a mixed-use project of hotel (Sheraton), apartments in a residential condominium, shopping centre, multi-use business centre and offices close to Recife using his company Promovalor and involving the Brazilian construction giant Oderbrecht. The project in 2011 was estimated at €200 million. The project ended up a white elephant and some of the loans to finance it came from Banco Espírito Santo (BES), which were assumed by Novobanco from 2014.
The fact that Vítor Fernandes name was mentioned in the Public Ministry investigations meant that the then Minster of the Economy, Pedro Siza Vieira, had to remove his name as a suitable candidate, at least until the investigations had been completed and the director had his name cleared of showing any preferential treatment to a big ticket debtor to the bank.
At the moment, Beatriz Freitas is simultaneously is doubling up as both CEO and President of Banco de Fomento which was created in 2020 with the encouragement of the EC to use the bank as a public investment and loan vehicle to support Portuguese companies in their process to modernise and become more competitive in a post-pandemic world.
The Ministry of the Economy told the online news source ECO that the process of choosing a future chairman of BPF is still ongoing and any developments will be announced at an opportune date.