When Santander Totta bought Banif at the very end of December 2015, it was worth €600 million, somewhat more than the €150 million purchase price.
Banif’s package of assets and liabilities that the state sold to Santander Totta had a book value of €600 million at the time the deal was done - hence the price paid was at a whopping 75% discount, according to a report in Jornal de Negócios today.
After acquiring Banif, Santander Totta decided to record a provision of €316 million for possible unexpected losses.
António Vieira Monteiro, president of Santander Totta, said on Wednesday that they had identified a few "surprises" in the Banif accounts, hence the €316 million provision.
A later valuation by Santander Totta showed the package of assets and liabilities it had received on buying Banif was at least €283 million, still representing a discount of 47%.
Parliament has set up a committee to look into the events leading up to Banif’s rushed sale and the role that the Bank of Portugal played in selling the bank off at a discount when a higher offer had been tabled.
If the sale can be shown to not have been ‘in the public interest,’ the guarantees and financial cushion extended to Santander certainly were not, then the Bank of Portugal’s governor Carlos Costa again will be in hot water over his performance which to date can be described as ‘disappointing’ if being kind, ‘appallingly below acceptable,’ if being realistic.
