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BPN has €4.5 billion black hole

The nationalisation of BPN has already cost the Portuguese State €4.5 billion.

The size of the troubled Portuguese bank’s black hole – BPB was nationalised in 2008 following the financial crisis generated by the collapse of Lehman Brothers – has been accepted by the Ministry of Finances in reply to questions at a parliamentary committee.

BPN’s total running debt currently represents the equivalent of 77.6 per cent of Madeira’s €5.8 billion debts.

A spokesman for Secretary of State for the Treasury and Finances, Maria Luís Albuquerque, has for the first time officially admitted the extent and size of the State’s “exposure” because of BPN.

The spokesperson also made it clear that the Government has no idea when BPN will be able to pay the €4.5 billion debt it owes to the State.

The Ministry of Finances has already indicated the loans conceded to BPN with State backing by State-run bank Caixa Geral de Depósitos, the timeframes of these loans and the actual responsibilities of the State.

It also revealed that the “financial responsibilities” are shared between BPN and three vehicles created in 2010 to “hold the toxic assets” for the bank run for ten years by José Oliveira e Costa.

From a total of €4.5 billion, the State’s active responsibilities amount to €3.1 billion as a result of credit conceded to Parvalorem, Parparticipadas and Parops.

The plan was to wait until the toxic assets had gained value or been redeemed before selling them on at a later date.