Run on Banif Bank sees “some branches remaining open till 5pm”

As the true situation of Banif Bank remains shrouded in uncertainty, the rush of clients withdrawing money or transferring their accounts to other banks has seen some branches stay open until two hours past their normal closing time, reports RTP news today.

In Madeira, where Banif is rooted and has 30 branches, the lines of people withdrawing cash began as soon as yesterday’s ‘news’ of imminent collapse started filtering through to the man-on-the-street.

But today, Público reveals the parlous state of Banif’s finances was perfectly known by both former finance minister Maria Luís Albuquerque and governor of the Bank of Portugal Carlos Costa as early as October.

Both “entered into shock”, said the paper, but appear not to have done anything constructive since.

Albuquerque – already on the way out due to the hung election result – is understood to have more or less told Costa that it was up to him to deal with the problem, and as the country is already painfully aware thanks to repeated exposure to bank collapses, taxpayers are almost certain to be left carrying the can.

Despite platitudes emanating from BdP to the effect that the situation in Banif being “accompanied” by all the right authorities, shares fell by over 40% on Monday, and though rallying slightly on Tuesday are still being measured in decimal points.

The disaster is being billed as “an early test for the government of Prime Minister António Costa” by the New York Times, which stresses this is not the only financial embarrassment clouding the festive season:

“Mr Costa’s administration was already facing another banking headache: how to sell Novo Banco” – the so-called good bank that emerged from the toxic ashes of BES, explains NYT.

With Banif headed for a similar BES-style carve-up – which, remember has failed to secure a buyer for Novo Bano – this is fast developing into the worst kind of Christmas story and another huge embarrassment for banking regulators.

For up-to-date details on the fiasco, and a look at how yet again this tiny country has been faced with financial mismanagement on a mind-boggling scale, see the Resident’s paper edition, out on Thursday.

natasha.donn@algarveresident.com