The tortuous sale of Novo Banco to US equity fund Lone Star has hit yet another hairpin bend as it careers towards the finishing line.
BCP (Banco Comercial Português) is now accusing bank regulators of illegality and unfairness – saying the deal promoted by the Bank of Portugal “flagrantly violates the rules of competition”.
The bank led by Nuno Amado is now challenging the sale in court, reports ECO online, stressing that whatever the outcome, the action in itself cannot stop the sale.
The nuts and bolts of BCP’s action centres on the “form of sale chosen” by the Bank of Portugal, and the guarantee this involves from the Resolution Fund.
BE firebrands Catarina Martins and Mariana Mortágua said very much the same from the outset, but this new push can be seen as coming ‘from the inside’, from bankers very much aware of every nuance of the deal.
Explains ECO, BCP’s administrative action is peppered with adjectives like “unacceptable”, “illegal”, “unjust” and “unbelievable”, and accuses the country’s banking regulator of violating “dozens of national and European laws, and almost 10 principles that are protected by the Constitution”.
As has been repeatedly explained, the knockdown ‘sale’ will see the country’s Resolution Fund (for this read: the country’s banks) liable for up to €3.9 billion.
This is after the fund originally stumped up €4.9 billion to create Novo Banco – from the BES debacle – and discover that it has become (or at least remained) an institution “than does not show itself to be commercially viable”.
BCP’s Nuno Amado stresses that it is not that his bank is against a sale, it is simply against this form of sale, and hopes that the administrative action will jolt some sense into the equation before it is too late..
BCP’s ‘ideal scenario’ would be “help” from the Single Resolution Mechanism, says ECO.
Wikipedia describes the SRM as “one of the pillars of the European Union’s banking union… directly responsible for the resolution of the entities and groups directly supervised by the European Central Bank as well as other cross-border groups”.