Novo Banco to ask for another €1 billion and change
Máximo dos Santos, who chairs the Resolution Fund, revealed that the New Bank will request 1.037 billion euros under the contingent capital mechanism.
The president of Portugal’s Resolution Fund said in parliament on Wednesday that Novo Banco will ask for an additional 1.037 billion euros for 2019 to recapitalise it under the mechanism negotiated with the state at the time of the former Banco Espirito Santo was sold.
At a hearing in the Budget and Finance Committee, at the request of the Left Bloc, Máximo dos Santos said this is the latest estimate.
“It is a high figure of course, below last year, but last year’s was already very high,” Máximo dos Santos told MPs.
The amount that the Novo Banco will formally request from the Resolution Fund will still have to be validated before a payment order is given.
Máximo dos Santos said that the Fund had €255 million of own revenue from contributions from banks, so for the remaining amount it will borrow from the public treasury, within the limit of €850 million in the state budget.
In 2017, as part of the sale of 75% of the Novo Banco to the US Lone Star Fund (the Resolution Fund has the remaining 25%), the State made an agreement to recapitalise the bank through the Resolution Fund (an entity in the State sphere) to cover failures in the capital generated by the toxic assets with which Novo Banco was left by BES (bad loans and real estate).
In total, according to this agreement, the Bank Resolution Fund can inject up to €3.89 billion into Novo Banco until 2026.
With respect to 2017 and 2018, Novo Banco has already received €1.941 billion.
