Maria Luís, former Finance minister, finds CGD’s need for capital “odd”

  • ECO News
  • 30 January 2017

The former Finance minister recalled that, in 2015, when José Matos was CGD’s CEO, he acknowledged the bank would not be able to repay the 900 million CoCos to the state in 2017, as was foreseen.

“Considering what you knew at the time, does it seem excessive that Caixa Geral de Depósitos needs a 5 billion euros’ capital increase?”. The question was posed by the Portuguese Social Democratic Party (PSD) deputy Inês Domingos and the answer given by Maria Luís de Albuquerque, who is being heard in the parliamentary board of inquiry to CGD’s management, as former Finance minister, was clear:

“I find it odd that the two CGD administrations have such different perspectives concerning the need for a capital increase”, stated Maria Luís Albuquerque, speaking of the administrations of José de Matos and his successor António Domingues.

There are two options. Either there is information unknown to us, or the margins and financial cushion to face future challenges have been evaluated in a significantly different manner by both administrations (…) The difference between the capital needs identified by José de Matos and António Domingues are justified by reasons we will get to know in the future.

Maria Luís Albuquerque

Former minister of Finance

Maria Luís Albuquerque, former minister of Finance, recalled the year 2015, a time in which José Matos, CGD’s CEO, signaled, “and rightly so”, that the public bank would need a new capital injection, after the 1,650 million euros’ recapitalization done in 2012. During that year, José de Matos told the minister of Finance – Maria Luís, at the time – that CGD “would not be able to repay the 900 million euros in CoCos in 2017, as was foreseen”. The former CEO “brought to the table the need for a new capital increase so that it could be cared for in due time”, stated Maria Luís de Albuquerque.

The former minister of Finance did not give away the details of which were the capital needs at the time, but she is still surprised by the needs now identified, of over five billion euros. “There are two options. Either there is information unknown to us, or the margins and financial cushion to face future challenges have been evaluated in a significantly different manner by both administrations”.

“The difference between the capital needs identified by José de Matos and António Domingues are justified by reasons we will get to know in the future; more important than knowing how much money will be injected to the public bank, we must know, objectively, what is the purpose of the money that is coming from taxpayers”, stated Maria Luís, current PSD deputy. “Only the administration and, surely, the minister of Finance [Mário Centeno] are in a position to clarify these major differences”, she concluded.