The State lent 430 million euros to Novo Banco this year, but Ricardo Mourinho Félix says the negative impact of these "significant impairments" will not be repeated in 2019.
The Portuguese secretary of State Assistant and of Finance, Ricardo Mourinho Félix, stated the 430 million euros’ loan the State would make to Novo Banco was a result of the significant impairments registered this year, somethings he hopes will not happen again in 2019.
Shortly after the Bank of Portugal announced the Resolution Fund made a 791.7 million euros’ injection in Novo Banco by means of the agreed capital contingent mechanism, yesterday, Mourinho Félix stated that part of the loan from the State, 430 million, stood slightly below the anticipated amount (450 million). Mourinho Félix stated he hopes this amount will not be repeated next year, although it all depends on the “evolution” that is registered.
“The capital contingent mechanism, in accordance with the terms of Novo Banco’s sale contract, lasts for eight years and has maximum limits. This year, Novo Banco, within the context of the assessment made by the supervisor and auditors, registered a highly significant volume of impairments in its assets that are under the capital contingent mechanism. Next year, those assets will be reassessed. Given this year’s evaluation, I do not expect significant impacts from there“, he stated.
The State secretary highlighted, however, that “it will depend on the evolution of the value of the assets, on the evolution of the economy and, therefore, also on the evolution of the supervision context”, meaning, “on the assessment made by supervisors according to the rules that have been changing concerning non-performing loans”.