Latest demand for over €1 billion sees Novo Banco dubbed Novo Buraco (‘new hole’)

With its latest set of accounts showing new losses of almost 1.5 billion euros, pundits have renamed Novo Banco (the so-called ‘good bank’ that emerged from the collapse of BES) as Novo Buraco (meaning ‘new hole’).

It is “a monumental hole”, said television commentator Marques Mendes who suggests authorities have been “profoundly immoral” in “tricking” Portuguese citizens into believing they had the country’s best interests at heart.

The problem was created two years ago when, during the ‘sale’ to US Lone Star fund, Finance minister Mário Centeno referred to a €3.9 billion ‘cash reserve’ to be left at the Novo Banco’s disposal.

Centeno “created the understanding that this cash reserve would probably not be used” said Marques Mendes, a former leader of the centre-right PSD party, further claiming that Centeno
“tricked the Portuguese people… id not speak the truth … and the Portuguese people have every reason to be indignant”.

Centeno’s cash reserve was presented as a “last ditch solution” when in fact all that has happened, year on year, is that it is depleted – just as opposition MPs predicted it would be.

The fact that Portugal’s finance minister has now ordered an audit to “scrutinise Novo Banco capitalisation process” is also just another form of hoodwinking people from “the calamity of the bank”, says the TV critic.

“It’s not genuine” because those in charge always knew the money would be used to make up for the bank’s catastrophic bad loans.

Say reports, on Sunday President of the republic Marcelo Rebelo de Sousa said he was in favour of the audit as “the Portuguese have a right to know what has happened”.

But the warnings were sounded long before the sale was signed (click here), hence critics’ fury.

And this latest demand for money certainly won’t be the last, add reports.

Answering this question from a television journalist, the current CEO of the bank António Ramalho said he could not guarantee that the bank would not ask for further finance in future “as the support mechanism was constructed exactly for the objective of leaving the bank clean”, which it is still clearly a long way from being.

natasha.donn@algarveresident.com