Faria de Oliveira: “This rumble is very negative both for CGD and the banking sector”

  • ECO News
  • 17 November 2016

The president of the Portuguese Banking Association (APB) says it is urgent to end the controversy around CGD. And he is confident there will be a solution for Novo Banco by the end of the year.

Fernando Faria de Oliveira, president of the Portuguese Banking Association (APB), considers the rumble coming from the new CGD’s administrators delay in handing in their declarations of income to the Constitutional Court (CC) is “extremely negative” not only for the public bank, but also to the banking sector, and he urged them to quickly solve the issue. These statements were made in an interview to the Portuguese newspaper Público and radio station Rádio Renascença.

“This entire rumble about Caixa Geral de Depósitos is extremely negative. Besides their recapitalization programme, the CGD needs stability and it also needs to start fully functioning. And this rumble is deafening, it is profoundly negative. It must come to an end”, Faria de Oliveira said.

When asked about the declarations’ submission to the CC, the APB’s chairman said “the interpretation of the law points to that direction” and that, regardless of the agreements made, this obligation is in “accordance with the law”.

Faria de Oliveira calls on the need to end this standoff as quickly as possible, due to the risks it portraits to the financial sector as a whole. “This issue must not be further delayed. The financial system – and any financial system institution – needs stability. This rumble is very negative, both to Caixa Geral de Depósitos and the banking sector as a whole”, states the chairman.

Solution for Novo Banco by the end of the year in sight

During the same interview, the sale of Novo Banco was a topic discussed. Faria de Oliveira seems confident it is possible to find a solution for the bank resultant from the resolution of BES by the end of this year. “I believe that by the end of the year we will be able to have new developments to help solve this issue, at least a negotiation to allow for a positive result”, states Faria de Oliveira.

The APB’s president also highlights that the most important aspect is that the shareholder’s future is “an entity as reliable as possible, in order to strengthen the Portuguese banking system”.

The investment funds Apollo and Centerbridge, Lone Star and Minsheng presented on November 4 their acquiring proposals for Novo Banco. The Portuguese bank BCP has informed the Bank of Portugal that it remains available to assess the dossier; Portuguese bank BPI has kept distance from the process.