The bank led by José Azevedo Pereira has set aside €5 million to address the impact of judicial and administrative proceedings related to the "Luanda Leaks".
EuroBic has set aside €5 million to address the impact of judicial and administrative proceedings related to the “Luanda Leaks”, but has registered no provision for possible Bank of Portugal’s administrative offences for matters related to money laundering.
In its 2020 report and accounts, the bank said that the controversy surrounding the “Luanda Leaks” led it to reduce its activity with Angola and to end its business relationship with “a significant number” of clients located in geographies with higher national risk.
However, according to the bank, this decision affected “the volume of income associated with trade finance operations with these geographies,” losses that it hopes to recover in the future, but not only. It also opened a cloud of uncertainty from a legal point of view that forced it to set aside money to cover potential problems in the future.
“It is also important to mention in this department the reinforcement of provisions for risks and expenses related to legal and administrative proceedings by about €5 million,” EuroBic detailed in last year’s report on this matter.
To ECO, the bank states that: “EuroBic has decided, after analysing the different ongoing judicial and administrative proceedings, from a prudent perspective, to reinforce the provisions for this type of risks and expenses by approximately €5 million. Naturally, the bank does not comment on ongoing judicial and administrative processes. It should be emphasised that these provisions have no direct connection with the Luanda Leaks”.
This figure does not include any amount for possible contingencies arising from Bank of Portugal’s administrative offences that may be applied to the bank due to matters related to the prevention of money laundering, which, moreover, led to inspection actions at the end of 2019 and beginning of 2020.
EuroBic argues that it should not make a “specific registration of additional provisions” to face possible proceedings by the supervisor, as the board of directors has paid particular attention to money laundering, as evidenced by the investments in the last two years and “the reinforcement of procedures and staffing that the bank has put in place in this department.”