The man recruited to prepare Novo Banco for sale this August, Eduardo Stock da Cunha said this morning that does not know how much the business is worth, and presented the bank's trading results, a whopping loss, by video conference from London.
Between August 4th and December 31st last year the bright new Novo Banco managed to make a loss of €467.9 million, hardly the sort of result to ensure bidders scramble over each other to buy up the bank in the forthcoming sale.
Stock da Cunha was brought in by the Bank of Portugal to replace Vítor Bento whose plan to build the bank up and sell it in the medium term, after a couple of years at least, did not fit the government's agenda.
The Bank of Portugal wanted a swift sale to recoup the huge sum of money that had been spent by the taxpayer and other high street banks to set up Novo Banco as the ‘good bank’ part of the bankrupt Banco Espírito Santo.
Bento soon was relieved of his command and miracle worker Stock da Cunha was brought in from Lloyds to get the bank ready for an August 2015 sale at a price that at minimum covers the €4.9 billion spent to set up and finance the bank.
When asked by journalists whether the bank now is fit to be sold and at what sort of price level, Stock da Cunha said, "I do not know how much Novo Banco is worth” and suggested that it was worth what someone would pay for it.
"I want to make it understood that our mission was to create value for the Novo Banco, to motivate people and to serve customers well and not be concerned about the selling process. It is not our concern. The question takes up just 5% of my day-to-day thinking," said Stock da Cunha who thought it appropriate to release the results from London and clearly has misread his brief from the Bank of Portugal.
The banking boss reported a rise in deposits of €4.2 billion to €27.2 billion and, despite losses of €108.4 million on the share price collapse of PT and Oi, Stock da Cunha said that "there is a very large perception that Novo Banco is much more solid and stronger than a few months ago," but that any other questions should be addressed to the Bank of Portugal, rather than to him.
The deposits figure is still €9.306 billion less than in June 2014 before BES went bust.
As for cost savings, the bank managed to cut 116 jobs between August and December and did not close a single of its 631 branches.
An astounding €22 million was spent on the early retirement of just 53 employees, an average of €415,000 each.
Overall, this is a sub-standard performance by a man who clearly is not in command of his allotted task, to maximise the value of Novo Banco for the August sale.
So, Novo Banco thus far - we see imperceptible cost savings, a five month loss of nearly half a billion euros, no idea from the man in charge of what the business is worth, his reluctance to answer questions and his indifference to the market by thinking it OK to remain in London on the release day of the most important set of results in the bank’s short history.
Few believe that a sale as early in the bank's history as this August will produce the sort of offer price to cover the initial bailout. Vítor Bento was rushed by the Bank of Portugal and lost his job, now there must be questions over Stock da Cunha's willingness to take the politically drive agenda and his suitability to drive the bank to a successful sale.
