Novo Banco contradicts Bank of Portugal, sending €527 million down the swanny

Contrary to what Bank of Portugal boss Carlos Costa promised investors, there is “no legal obligation” for any of the money invested in bonds in Grupo Espírito Santo to be paid back by Novo Banco.

The head of the “good bank” Eduardo Stock da Cunha delivered this bombshell today, effectively saying Carlos Costa had lied when he guaranteed investors exactly the opposite.

Stock da Cunha was backed by his counterpart at the “bad bank” still holding BES’ so-called toxic business – which includes a €835 million loan to Goldman Sachs which, again, Costa had promised would be met by Novo Banco.

As Goldman Sachs prepares to fight the turnaround in court, and Stock da Cunha explains his bank is still by no means out of the woods, questions now are on how much longer Carlos Costa can remain at his post.