Mário Centeno will support Associação Mutualista Montepio if needed

The Portuguese Finance minister, Mário Centeno, acknowledged the Portuguese State may have to help Associação Mutualista Montepio, in case of need. Centeno also acknowledged that Novo Banco might need capital injections in 2019.

In an interview to the Portuguese newspaper Jornal de Negócios, the Finance minister stated that “the ultimate keeper of financial stability is the Government, and within the Government, it is the Finance minister”, and so Portugal must be available to help Associação Mutualista Montepio.

“If and when we are called to do so [help Montepio], we must guide ourselves by the principles that we have followed so far. And it is clear that we need to look at the financial system as a whole, as we have been doing so far, but also with the added certainty that it is sturdier than a few years ago”, Centeno stated.

The Finance minister underlined that the Government “must be prepared to take economic policy measures that assure the recovery of the country allows for a sustained recovery of all corporate and solidarity institutions, which suffered throughout the years, worsened by the crisis”.

In the interview, Mário Centeno also spoke about Novo Banco. He emphasized that the banking institution “may” have to make further capital injections next year, although “significantly lower than in 2018”.

“Our expectation is that capital injections will have a significantly lower profile in time and if those injections need to exist, and that capital need may be needed in 2019, will be significantly lower than in 2018“, Centeno stated.

The governor also stated that the State will make a loan to the Resolution Fund in 2018 because of Novo Banco: “It not yet closed, but should stand at around 450 million euros“. Centeno added: “It is a State loan to the Resolution Fund which is a public administration entity and so it has no impact on the deficit”.