“No white smoke” at midnight as Novo Banco sale remains shrouded in uncertainty

D-Day for the sale of Novo Banco came and went yesterday, with no-one any the wiser as to what has happened.

“Market in the dark over winner of Novo Banco”, wrote Expresso last night. “In the end, who bought Novo Banco” queried TVI24 this morning, while the Financial Times correspondent in Lisbon added: “Novo Banco reveals €252 million loss as buy-out deadline passes”.

The truth is that negotiations between the Bank of Portugal and Chinese insurance group Anbang have been long and arduous for multiple reasons. Novo Banco’s crippling losses, looming ECB stress tests and pending multi-million euro court cases are just the tip of the iceberg.

As the FT explains, this “would be the first acquisition of a systemically important European bank by a Chinese group”.

Given China’s authoritarian regime, will the sale be sanctioned by the European Central Bank – and is Anbang’s offer really the best one on the table?

Following last week’s collapse of Chinese markets, the deal has become ever-more complicated with national media constantly alluding to the fact that Anbang’s offer – thought to be €3.5 billion – is at least €1.4 billion short of the money ploughed into Novo Banco when it was created in the “good bank/ bad bank” carve up following the collapse last summer of BES.

With “maximum pressure” said to be coming from the coalition government which “wants to close the deal before the elections”, the Bank of Portugal is this morning playing things very close to its chest.

National tabloid Correio da Manhã claims none of the major national banks involved in the Resolution Fund have even been party to the sale negotiations.

Elsewhere, the lack of transparency in all matters tinged by BES continues, with the head of BES’ “bad bank” Luís Máximo dos Santos announcing yesterday that he would not be revealing details of the bank’s 2014 accounts within the stipulated time period.

In a statement issued on the day the sale of the good bank was due to be settled, the man in charge of the bad bank claimed “the necessary conditions” for showing condensed financial reports “were not reunited”.

CM carried an exclusive on the topic, suggesting BES’ bad bank is currently assailed by no less than 936 court cases, involving 290 million euros.

As the financial world thus awaits clarification on Novo Banco’s “D-Day”, another main contender in the running – US group Apollo – is described as “ready to move in, if called”.

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