Offers below 4900 million “delay” sale of New Bank – publico

                 

                         
                     

                         

                 

 
                         

The three candidates for the purchase of the New Bank delivered cash offers well below the 4900 million injected into the institution, which has led the Bank of Portugal asking for proposals and improved to extend the deadline for closing the file.

                     

                          After the end-of-week “black” that dictated the collapse of BES and culminating in the announcement of state intervention to August 3, 2014, at 22h45, the New Bank remains within the scope of bop. This contrasts with the initial indication of Carlos Costa, Governor of the Bank of Portugal, that the institution now led by Eduardo da Cunha Stock pass to the private sphere “by the end of July 2015.”

But this is a process whose bottom line depends on the result of the sale of the New Bank and its impact on taxpayers. This, as the second largest Portuguese private bank, which was for more than a decade a center of connivance generator power, went bankrupt in the public square for all to see with historical losses of 3600 million.

Death It was announced a year ago, which highlighted shared responsibilities between the bop and the Ministry of Finance, but also the CMVM. He showed that when the timings are guided by interests of third parties, politicians or others, but not the institutions, there preventable side effects (injured in debt buying the group through the bank). Some argue that BES should have been operated upon in late 2013 when it was found an uncontrolled exposure to GES and BESA).

3 August 2014, the Finance Minister, Maria Luís Albuquerque issued a note to clarify that “taxpayers will not have to bear the costs related to the decision taken today.” And being the Resolution Fund mechanism a choice of government, it is likely that the cash inflow, the best price, is the main criterion in choosing the future owner of a bank with 18% of the market.

Today it is widely held among investors say that “buying a bank is the same as buying problems. And buy a bank in Portugal [at levels of incipient economic growth] are additional problems “and a fortiori, the thesis applies to the New Bank, conditioned by its own transitional nature, with a future full of uncertainties:. That “skeletons” holds in the portfolio (credit risk)? Which entities will respond before the litigâncias running against the institution and which tend to last for many years?

This doubt framework have contributed to the final phase of the contest, held in late July, the BoP has returned to the origin binding offers from three candidates. The Chinese Anbang (without insurance business in Portugal) and Fosun (which bought the state Fidelity Bank and the New Health Light) and the bottom of private equity US Apollo (who acquired the New Bank Tranquilidade) expressed firm intentions to acquire away from 4900 million to allow the BoP and the Government consider the operation a success.

Note that the state lent the resolution fund, anchor in the financial sector , 4400 million from the state line negotiated with the troika. The Fund managed by BoP in NB put the remaining 500 million. So any proposal under 4900 million will result in a loss to be borne by the whole system, which will affect the CGD with 30% market share, and, in this way, taxpayers. And to have to absorb “losses”, banks degrade the results will also be reflected in less revenue for the state.

It is the size of the losses that the authorities are now seeking to minimize boosting the sale of New Bank . And therefore, they asked the Anbang, the Fosun and Apollo, who until August 7 to submit bop new binding intentions. A part value is fit to the seller, the other intended to recapitalize NB, which requires new injection of funds to 1500 million. Beads made (and including the controversial capital increase of June 2014, still with Ricardo Salgado ahead of the bank), with additional support will have to be made, the institution has received in the last 14 months, approximately EUR 7500 million .

The last few weeks have been animated for clues, but it is unknown whether they are on the right way or if after all fabrications are to encourage the resolution of NB. According to the media, the more tempting financial envelope will be the Anbang Chinese insurer, set up in 2004: 3,200 million in cash, another million to recapitalize the New Bank. In 2014 the Anbang purchased the Waldorf Astoria in New York, by 1800 million.