Novo Banco

Audit blames BES for Novo Banco €1 billion black hole

The final report of an audit by Deloitte on the financial state of Novo Banco has placed the blame for the ruinous state of the bank’s finances squarely at the door of the failed bank Banco Espírito Santo and its management under former chairman Ricardo Salgado.

The full report, which was delivered to the Portuguese government this week, concludes that the majority of Novo Banco’s financial problems arose, to a great extent, because of Ricardo Salgado’s management of Portugal’s once most respected financial institution BES, which collapsed in 2014.

According to the daily business title Jornal Económico, which cites a source close to the auditing process, the final version of the document – which passes a fine tooth comb through the past 18 years of BES and the bank that was created from its ruins, Novo Banco, to 2018 and reveals credit problems (a €1 billion debt) and the controversial sale of properties at a discount – was handed to the government on Monday, August 31.
In July, Deloitte presented a rough outline of the audit’s findings at a time when the final document should have already been completed and presented.

The newspaper mentions that the Novo Banco losses from the sale of credits and properties inherited from BES are “to a great extent” the result of “massaging of the accounts by BES itself (i.e. BES senior figures cooked the books).

This led the Public Ministry to accuse 25 legal suspects along with Ricardo Salgado of criminal association, active corruption in the private sector, qualified fraud, capital laundering and tax evasion. 

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