When questioned about a possible additional request for €100 million next year, João Leão said he hoped Novo Banco would not ask for more money from the Resolution Fund.
Portugal’s finance minister said he did not expect Novo Banco to ask for more money from the Resolution Fund, although the bank led by António Ramalho has already signalled it will ask for another 100 million next year. João Leão left criticism of the bank’s management.
“We really hope there will be no more capital calls and that Novo Banco will focus on having positive results,” the finance minister said on Wednesday at the Novo Banco enquiry commission.
João Leão said he could not guarantee that the injection of 429 million that the Resolution Fund is preparing to make in the coming days will be the last, as there is a contract valid until 2026.
Also, “there are processes that are being assessed in arbitration court, worth over 300 million,” the minister recalled. “It depends on the court’s decision [no more money for Novo Banco], but there I am not talking about a new call.”
On several occasions, João Leão put the bank in the spotlight. “Novo Banco should focus on good management and making profits,” he told the MEPs. He also said that the bank’s attempt to maximise capital calls through the sale of its Spanish branch was “unacceptable” and “incorrect”.
“There were issues related to the sale of the operation in Spain where there were differences of understanding between the Resolution Fund and Novo Banco. We follow and understand the Resolution Fund position. We find this attempt by Novo Banco to simultaneously benefit, in its 2020 accounts, from the sale of the Spanish branch and call up capital and then taking advantage from the reduction in capital requirements in 2021 unacceptable,” João Leão said.
The bonuses attributed to the bank’s management also warranted criticism from the minister. “In a bank with the conditions that it had until 2019 and 2020, with the results that it had, with the need for support from the Resolution Fund that it had, it doesn’t seem appropriate to us to award bonuses,” João Leão added.