EuroBic lost 600 million euros in deposits with Luanda Leaks

  • ECO News
  • 9 June 2020

The money deposited in EuroBic fell by more than 600 million euros in the first quarter, with the reputation of the bank affected by Luanda Leaks and the controversy involving the Isabel dos Santos.

The Luanda Leaks case, revealed by newspapers in mid-January, led to a deposit run of over 600 million euros from EuroBic, with news surrounding shareholder Isabel dos Santos “significantly” affecting the bank’s reputation and the depositors’ confidence.

The financial institution led by Teixeira dos Santos, which is about to be sold to Abanca, closed the first quarter of the year with deposits of around 6.3 billion euros, 640 million less than at the end of last year before the controversy over the origins of the Angolan businesswoman’s fortune was sparked.

Faced with all the pressure, the bank took immediate action: it immediately began by cutting off the commercial ties with Isabel dos Santos and people related to her. And, as it was losing deposits at the height of the turmoil, it was selling debt securities to ensure comfortable levels of liquidity, above the limits required by the ECB. According to the financial statements for the first quarter, EuroBic sold over 300 million euros of these securities between January and March.

Bank worth up to 280 million

If the first quarter of the year was atypical for most banks because of the Covid-19 crisis, it was even more so for EuroBic because of Luanda Leaks. These two factors helped explain the bank’s poor operating performance between January and March. The bank saw its profits sink 66% to just 4.5 million euros. And this, after the record profits of 61 million euros achieved in 2019. Nevertheless, the bank maintained its net worth during this period with equity of 572 million euros.