Contrast the statements by the Governor of the Bank of Portugal since 2013 shows negative evolution of Banif case. Three years ago, Costa said that the injection of 1100 million would give 10% profit to the state
“It’s not unrealistic” that the State has profit with the help Banif. This was one of several optimism demonstrations Carlos Costa sent in February 2013 to members of the Parliamentary Committee on Budget and Finance, weeks after injection of 1100 million civil euros in the bank (700 through special shares and another 400 in contingent capital instruments – the CoCos). Summoned to talk about the Banif recapitalization with state aid, Carlos Costa materialize this optimism, “which is expected in the business plan is that Banif will be able to provide, by the end of the period [five years] an estimated return for the state share of 10%. “
the state, explained the governor would have a gain” resulting from business “, combined with the fact that you have bought cheap stocks that would return more expensive:. the state will still have the remuneration corresponding to the “recovery of the title because the bought off,” said
Costa stressed even if the hypothesis was not an academic delirium “is not unrealistic that the plan business contemplates a hypothesis remuneration of public capital and take as acceptable and predictable return a value of 10% which corresponds to a situation of normalization of the markets “, held in parliament.
Three years later, the speech is very different. However, Banif saw rejected by the General Directorate of European Competition (DGCom), multiple versions of the restructuring plan aimed at slimming down the bank; He tried, unsuccessfully, a voluntary sale; and ended the year “settled” – cut into slices – with much of the business sold to Spain’s Santander for 150 million euros. In the process, the state took a charge of 2.2 billion euros. Adding to this figure the 825 million that Banif was the public coffers – and that are unrecoverable – and subtracting the value of the sale, the final cost to taxpayers will be about 2.9 billion
. in short, nothing went as predicted three years ago. And the contrast between the statements of Carlos Costa on the subject in February 2013 and the end of January 2016 shows that.
Banif was subject to “increased supervision”
what the Bank of Portugal has to do, explained the Governor just over two months ago, it is to supervise. And then, assures Carlos Costa, there were failures because “Banif was subject to all the procedures that the other banks were subject, and in particular cross-inspection program, the inspection program for real estate exposure and construction, and was subject an external audit of its complexity, it was decided to simplify its structure, “said the official in the Budget and Finance Committee, who called him a kind of warming to the Parliamentary Commission of inquiry which has now arises – and under which will on Tuesday be heard. The Governor assured even that “from the point of view of supervision, Banif was not ignored, on the contrary, has been subject to increased supervision” that resulted “of their nature and the fact that it was recapitalized”
Banif Administration to explain
the Bank of Portugal, guaranteed Carlos Costa, “is not responsible for the bank’s management.” This, moreover, was a constant touchstone in the parliamentary hearing for two months: the regulator regulates, does not manage; supervises, does not draw restructuring plans, which are bank management responsibility. “The Bank of Portugal is not responsible for institutional exogenous conditions that does not control and is not responsible, of course, the macroeconomic conditions that determine the emergence of impairment. It is also not responsible for the bank’s management,” he stressed MEPs. And he insisted: “. It is obvious that it is not up to the Bank of Portugal explain why the recapitalization plan was not successful The Board of Directors explain what were the constraints, constraints and the difficulties he had in the implementation of that program” .
the attempt to explain the regulator’s responsibilities in the event – and the Banif board of directors – were also mentioned another time: “will naturally fall to the Board of Directors explain the difficulties – and make no value judgment – that was faced in the implementation of its recapitalization and in particular plan explain why the successive versions of the restructuring plan were being rejected by DGCom, “he said, stressing that” the Bank of Portugal has no intervention or the presentation of DGCom restructuring plans or the approval of such plans. “
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