D-Day for Banif, as prospects look worse than ever

With share trading suspended by banking regulators yesterday (Thursday), today sees an effective D-Day for Banif Bank as potential losses for the State appear to be getting larger by the moment.

According to Económico website, all signs this morning point to the Madeiran bank being sold at a bargain basement price, with the State being left with every single one of Banif’s toxic assets.

Diário de Notícias confirms the picture, adding that all Portuguese and Chinese contenders in the “race” to buy the State’s 60.5% holding in the bank have already pulled out.

Still believed to be in the running are six European and American candidates, among them Spanish banks Santander and Popular, and US investment fund Apollo which showed (in)sufficient interest in buying up Novo Banco earlier this year.

What is certain, stresses DN, is that “the sale will bring in a great deal less than the €700 million that the State injected” into the bank as a result of its 2012 bailout.
With the deadline for proposals running out at 8pm tonight, Económico suggests it may be that the government decides against selling at any price, and comes up with a Plan B.

Talking to Diário Económico, a source explained: “The government doesn’t want a repeat of what happened with BPN and BIC, when every year a new bill appeared that the State was obliged to pay”.
Already thinking of Plan B days ago, the prime minister told journalists: “I hope that whatever solution transpires it protects taxpayers as much as possible. The guarantee that we give taxpayers cannot be the same as the one we give (Banif’s) depositors”.

In the intervening period, the majority of Banif’s ‘depositors’ – certainly when it comes to account holders – have withdrawn their money and transferred their accounts elsewhere.

natasha.donn@algarveresident.com