The Bank of Portugal has now defined ‘soon’ as its governor announced today that Novo Banco, the new name for the OK parts of bust lender Banco Espirito Santo, will be sold off in the ‘mid to second half of 2015.’
Carlos Costa assured that the sale of Novo Banco will be made in a "transparent and open way." This will be a pleasing change from the opaque and covert manner in which BES was run by Ricardo Salgado.
"Indicative offers will emerge early next year and binding offers between April and the middle of the second quarter 2015," said Costa during his appearance today at the parliamentary inquiry into the BES affair.
The governor said that the Novo Banco sale will be transparent and that the process also will be monitored by the European Commission, indicating the depths to which his regulatory role has sunk.
Costa hoped also that the Novo banco sale price would be enough to pay off the money lent to the bank by the government and other high street banks during its rescue and recapitalisation, although he knows this a long shot and certainly would not guarantee it, managing to skirt around the question for while.
The governor is under pressure to ensure Novo Banco performs, yet almost powerless to intervene in its management. The bank has a state loan of €3.5 billion which needs to be paid back in 2015, according the 2015 budget, and the Finance Minister and Prime Minister will feel more than a little let down should the sale of Novo Banco not recover this loan hastily made with taxpayers' funds.
Carlos Costa was the first to be heard by the new commission of enquiry in to the BES affair and his job looks increasingly at risk as the events leading up to the BES collapse were laid bare.
The governor was shown in a poor light today and clearly had been ineffective at regulating the financial sector when he knew that BES was in trouble yet decided not to tell anyone, deciding instead to believe the litany of excuses given by BES magnate, Ricardo Salgado, until it was all too late.
