Marcelo “astounded” that Novo Banco needs more capital

in Business · 19-06-2020 01:00:00 · 1 Comments
Marcelo “astounded” that Novo Banco needs more capital

The President of the Republic has said that he was “astounded” by the news that Novo Banco will need more capital than expected for this year due to the impact of the Covid-19.

“I don’t usually comment on specific cases relating to banking institutions. I heard the news, I was astounded by it, but I don’t really comment on that type of news, so as not to be getting into the concrete situation of financial institutions,” said Marcelo Rebelo de Sousa.
Novo Banco’s executive president, António Ramalho, said in an interview with Jornal de Negócios and Antena 1, that “the deterioration of the economic situation leads to slightly additional capital needs” to those estimated for this year and that this were communicated to the Resolution Fund.
The money received by Novo Banco to recapitalise totals €2,978 million since 2017, after on 8 May the Government confirmed that a new capital injection was made through the Bank Resolution Fund.
The amount transferred this week was made under the mechanism agreed in the sale of Novo Banco to Lone Star, in 2017, according to which the Resolution Fund compensates the bank for losses in assets with which it was in Banco Espírito Santo’s resolution.

However, since the Resolution Fund, an entity financed by banks operating in Portugal, does not have the money necessary for capital injections at Novo Banco, every year it asks the State for money, to which it must return the loan over 30 years.
This time, of the €1,037 million that the Resolution Fund placed in Novo Banco, €850 million came directly from the State.
Also in 2018, of the €1,149 million placed at Novo Banco, €850 million came from a loan from the Treasury. In 2017, of the €792 million injected, €430 million came from a public loan.
In total, Novo Banco has already received €2,978 million from the Resolution Fund to recapitalise, of which €2,130 million were from Treasury loans.
The Government expects the Portuguese economy to decline 6.9 percent in 2020 and to grow 4.3 percent in 2021.



Comments:

We should have never bailed out anyone, we should let all these financial institutions and TAP go under!

by Anna from Madeira on 21-06-2020 11:35:00
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