Novo Banco, born on the smoking ashes of the BES in 2014, estimates that it has to ask for at least 541 million euros more to the resolution fund in order to be saved. The Portuguese bank announced this need in its report on the results of the first half of this year. On their side, Portuguese MPs approved a draft resolution recommending to the government an independent audit of Novo Banco to know when this bottomless pit will stop. In addition, Novo Banco recorded a loss of 400.1 million euros in the first half of this year, compared with 212.2 million euros for the same period in 2018, which means that the situation is not improving. What is the statement of Novo Banco in the middle of the holidays? Who will pay the bill? Lisbob, the assistant of the expats in Portugal, tells you all about this new loss of Novo Banco.
In the first half of this year, Novo Banco recorded an increase in write-downs and provisions, which doubled to 515 million euros, compared to 248 million euros in the first half of 2018. The Portuguese bank, which took over part of the assets of the former BES - died in 2014 - explains that in the first half of 2019, "it recorded losses related to the process of restructuring and deleveraging of non-performing assets, namely the project Sertorius (real estate) , the Albatroz project in Spain and the sales process of GNB Vida, whose negative impact amounted to 340 million euros ".
In the statement, the group headed by António Ramalho recalls that "it has its Tier 1 capital ratio [CET1] and Tier 1 ratios protected at predetermined levels, up to the amount of losses already suffered on assets protected by the Possible Own Funds Mechanism ". Understand who can this blah.
"The amount of capital compensation estimated in the half-year accounts is 541 million euros," the statement said. "The compensation required at the end of the year will depend on the current losses and costs, recoveries and capital requirements," he adds.
At the end of June this year, the bank's CET1 ratio was 13.5%, compared to 12.8% in December 2018, and the total solvency ratio was 15.1%, compared to 14.5% at the end of June of last year.
Portuguese MPs vote a recommendation for an audit
In July, MEPs approved a draft resolution recommending that the government conduct an independent audit of Novo Banco for the post-resolution period. The recommendation was approved by PS votes.
The purpose of the audit is to better understand the factors that drive Novo Banco to continually request capital injections from the Resolution Fund, which is fed by the Portuguese State and therefore by the Portuguese themselves.
Novo Banco is 75% owned by the US Lone Star Fund (USA) since October 2018, with the Resolution Fund holding the remaining 25%.