Novo Banco – the good bank that rose from the toxic ashes of BES – has put in a request for another billion euro cash-injection.
The money will come from the Resolution Fund – which has to ‘borrow’ from the State because it doesn’t have enough money itself.
This is exactly the ghastly scenario politicians predicted back in 2017 when PS Socialists supported the bank’s ‘sale’ (widely described as ‘ruinous’ click here) to US ‘vulture fund’ Lone Star .
Explain reports, under the terms of the sale, the Portuguese State pledged to recapitalise the bank to a limit of €3.89 billion by 2026 (click here).
This does not include the €3.9 billion it injected at the moment of ‘resolution’ of the BES crisis.
In other words, the State was ‘down €3.9 billion before Novo Banco was sold to ‘vulture fund’ Lone Star in 2017 – and since then it has had to stump up a further €1.941 billion (for shortfalls in 2017 and 2018).
The new request will thus bring the total bill this far to almost €7 billion – and there’s still a possible €1 billion left to shell out should the bank say it needs it.
For now, political reaction to the gathering ‘bombshell’ awaits explanations due to be given in parliament today by president of the Resolution Fund Luís Máximo dos Santos, while Novo Banco’s president António Ramalho has also requested an audience with MPs.