As MPs knuckle down to yet another dismal banking post-mortem, former hot-shot regulator António Varela (pictured) has left no one in any doubt on the Banif disaster.
“Banif was a bad bank, a dreadful bank,” he explained in what has been presented as his personal interpretation of the fifth national bank collapse under the watch of Bank of Portugal Governor Carlos Costa.
“It was a very heavy personal and professional shock,” former BdP director António Varela told the commission. “I thought about it a lot and concluded that the principal aspect is what Banif was like before 2012” (when politicians started realising that huge sums of money had to be pumped into it by way of resolution. In 2013, the centre right government under Passos Coelho injected €1.1 billion into the bank that then staggered on until its major debacle late last year which has cost Portugal over €3 billion and seen Banif’s ‘good business’ snapped up by Santander).
Varela’s ‘conclusions’ resulted in the realisation that Banif was a “very bad bank, a dreadful bank” with “the wrong strategy, idiotic investments in Brazil and Spain, and a policy of credit very concentrated on property” that translated into “half a dozen clients” and “very doubtful criteria” on which money was handed out.
Was it worth bailing out in 2013, he asked – adding quickly that this question was not one that ever had to be answered by him. It was one better directed at Banif’s former boss Jorge Tomé, “a born optimist”, and BdP governor Carlos Costa, who “also believed in the viability of the bank”.
Varela – who left his role at BdP earlier this month (click here) – gave the commission nothing but ‘bad news’, saying he never stayed in jobs where he could not give a contribution, thus his resignation.
The commission began its work on March 29 and is due to talk to as many 75 key figures, including former European Commission president Durão Barroso, Jean-Claude Juncker and former PSD prime minister Pedro Passos Coelho, writes Observador.
The “inevitable” questions, says the news service, are: who was responsible for Banif’s costly ‘resolution’, why was it so expensive and why was there no alternative?”
