FINANCIAL TIMES
Portuguese government rejects Novo Banco nationalisation calls
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Portugal’s Socialist government has dismissed calls for the nationalisation of Novo Banco as the country’s financial authorities prepare to launch a second attempt to sell off the so-called good bank salvaged from the ruins of Banco Espirito Santo.
The Communist party, which supports the minority government in parliament, has made a formal proposal for a state takeover of the troubled lender, which reported a €981m net loss in 2015 with positive operating earnings cancelled out by €1bn in new provisions for risky assets, Peter Wise reports from Lisbon.
Lisbon wants to sell Novo Banco, created in 2014 when BES was split into “good” and “bad” banks, to recover €4.9bn injected into the lender by the country’s bank resolution fund. But a first attempt was called off last year because bids were too low.
Nationalisation was “a possible solution” that should be studied in terms of its potential impact on the Portuguese banking sector and wider economy, Vítor Bento, a former central bank-appointed chief executive of Novo Banco, told the Diário Económico newspaper.
But senior government officials brushed aside the idea of state ownership, saying the administration was firmly in favour of a “market solution” and the sale of Novo Banco to private-sector investors. Nationalisation would also almost certainly contravene EU rules on state aid.