EY will be CGD’s new auditor

  • ECO News
  • 12 May 2017

Caixa Geral de Depósitos (CGD) will change auditors and the Government has made its choice. EY won the race for one of Portugal's largest contracts and will be the new auditor of the public bank.

Caixa Geral de Depósitos (CGD) will change auditors in the next general assembly because of new audit rulings and, according to ECO, the Portuguese Government has chosen EY.

CGD‘s current auditor is Deloitte, and in the beginning of 2016 it had extended its contract for another year because of an exceptional norm and because of a change in the board of administration.

Now, a new team took office in the beginning of the year, and so CGD‘s supervisory board, headed by Guilherme d’Oliveira, will have to formally present a new auditor to the State. The decision on the auditor will be made in a general assembly, still to be scheduled. And the name to be presented to Mário Centeno, Finance minister, will be EY, headed in Portugal by João Alves.

Officially, no one is making any statements on the topic. The decision belongs to the shareholder (the Portuguese State) and will only become official in the general assembly, although that decision is already made. In addition to EY, PwC and KPMG were also on the run for the public bank’s account, which is worth around two million euros per year, according to sources from the market.

We should recall EY was chosen by the Government for an independent audit to CGD concerning the period between 2000 and 2015. The announcement was made by the Finance minister Mário Centeno last April 26, in the Economy and Finance commission, in Parliament. The choice was made because EY was not the auditor of the public bank in the period being analysed. The audit, which will happen throughout 15 weeks, will concern the granting of credit, the disposal of assets and the strategic and business decisions. Regardless, the consulting job does not keep EY from being chosen as CGD‘s auditor for the next three years.

The market is, in fact, changing. The new audit supervision law and the mandatory rotation of auditors has allowed, for example, PwC from winning EDP and Mota-Engil‘s accounts, in addition to being the most important financial system auditor. Among others, it is the auditor of Santander Totta, Novo Banco and BPI.