They were elected to the assembly of representatives in December. Four months after they took office, Bank of Portugal said the three directors cannot continue in the Associação Mutualista.
The Bank of Portugal sent a letter to Banco Montepio saying that three top directors from the bank cannot continue in the assembly of representatives of the Associação Mutualista Montepio Geral (AMMG), according to information provided by two sources to ECO.
The banking supervisor does not want Pedro Araújo, Isabel Silva and Ernesto Silva to remain on that mutualist body to which they were elected back in December, given the risk of a conflict of interest as they are both directors of the bank and directors of AMMG, the bank’s owner.
Pedro Araújo and Isabel Silva (who also sits on the board of the assembly of representatives led by Edmundo Martinho, president of the Santa Casa da Misericórdia de Lisboa) were elected from list A, while Ernesto Silva was elected from list D in the AMMG elections held last year.
Pedro Araújo and Isabel Silva are even identified by the bank as key management personnel, according to last year’s report and accounts.
The three were able to stand for election at Montepio because they were associates of the institution. Elected in December, they took office in the first days of the year and now, four months later, the Bank of Portugal identifies problems of compatibility with the position as representatives of AMMG.
If they have to leave, Pedro Araújo and Isabel Silva and Ernesto Silva will be replaced by the substitutes who were elected by their respective lists, as determined by Montepio’s internal provisions.
The assembly of representatives comprises 30 leaders and replaced the institution’s general council, abolished in 2020, but with enhanced powers: approving and rejecting budgets and accounts, deciding on the sale of shares in group entities, and electing the management remuneration committee, among other powers.
In the last decade, the supervisor has forced a separation between the bank and the mutualist at board level, to ensure independence between the two institutions and that the risk of one does not affect the other. In fact, it even forced the bank to change its name to avoid confusion with the parent company’s brand, changing from Caixa Económica Montepio Geral to its current name Banco Montepio.
The Bank of Portugal has the bank under its supervision, while Associação Mutualista is under the auspices of the Ministry of Labour, Solidarity and Social Security and will be supervised by ASF – the insurance regulator – within a few years.
ECO contacted the bank, which declined to comment. AMMG also declined to comment as it “has no knowledge of the situation”. The Bank of Portugal did not reply to ECO’s questions.