Prime Minister’s letter “undermined confidence” in troubled bank

A letter that was sent to the European Central Bank and the European Commission by the Prime Minister “undermined confidence” and had a “detrimental effect” on the way troubled Portuguese bank Banif was viewed by Brussels.

This is the opinion of former Banif CEO, Jorge Tomé who led the bank when it was wound up and sold to Santander Totta in 2015 just days after the letter had been sent to Jean-Claude Juncker and Mario Draghi.
In an exclusive report by the online news source ECO, Tomé, who today is the managing partner at Optimal Investments, said: “The essence of what that letter was saying did not make financial or economic sense on the date that it was sent”, he said.
Tomé also questioned if as a result of winding up Banif (20 December 2015) Novo Banco’s restructuring plan had been approved the very next day (21December, 2015) as “an offset”.
“Was that a coincidence or was something else going on” … there must have been some reasoning behind it, other than party political infighting”, he said.
When asked about the impact of the letter sent to Brussels on December 14, 2015, he said: “It is easy to conclude the impact that a letter with such content would have on the ECB and DGComp (European Union Competition Authority) having a very negative effect and would foment distrust”.
Seven years ago Banif, founded by Horácio Roque, went through difficulties and was submitted to a restructuring plan after receiving a public bailout in 2012. The bank was wound up by the Bank of Portugal which sold a large part of the bank’s activities to Santander Totta for just €150 million.
Jorge Tomé said he “could not find any financial or economic justification or even any reasons within the context of the balance of the Portuguese financial system for the letter on the date that it was sent”.
He said that the key question was why Prime Minister António Costa did not reply to a number of questions from the PSD party on allegations of political interference at the bank.
To date over 3,000 creditors from Banif are owed €950 million but the bank only has €58 million to pay out. The sale of the bank to Santander cost the tax payer €2.25Bn.