DBRS places the rating of CGD under negative perspective – the Public.en

The agency the canadian DBRS (which has been responsible for maintaining the Portuguese public debt in the program of purchase of assets of the European Central Bank) has placed the debt of Caixa Geral de Depósitos under review with negative outlook, following the departure of António Domingues and a good part of the management team of public bank.

The review, explains a news release from the agency, reflects "the increased risk that the group is facing" in regards to matters of corporate governance, the problems of the recapitalisation planned, and are still "ongoing difficulties in improving the profitability and quality of assets". The press release specifies that the review "will consider how the recent resignation, the 27 of November, of a majority of the board of directors will affect the restructuring planned of the group". In addition, the DBRS shows concerns over "delays" in the execution of the recapitalisation plan.

the recapitalisation of The box passes by a capital increase of 5160 million euros, which has already been approved by the european authorities. Of this amount, 2700 millions are an injection of public money, 500 million will come from the ParCaixa (a public company, management of capital), and 960 million of instruments of contingent capital subscribed by the State. To that the recapitalization complies with the rules of Brussels have yet to the emission of 1000 million euros of debt, which will need to be purchased by private investors.

under the review, which will have a maximum duration of three months, will be reviewed 12 financial instruments of the Box and the rating of the global group, currently at BBB(low), also may undergo changes. If there is a descent of this note, the public bank will not be considered by the agency as worthy of investment, a category that is often known as “garbage”.

The output of António Domingues has been communicated by the Government on Sunday night, leaving the executive to search for a solution (which must be approved by the European Central Bank), after months of deadlock on the issue of the presentation of the declarations of income and assets.

prospects for the Portuguese economy also played a role in the decision to put under negative outlook for the ratings of Caixa Geral de Depósitos. "DBRS believes that the CGD continues to have a challenge on the return to sustainable profits, due to a continued deterioration of asset quality and the challenging environment in which it operates, which is characterized by low interest rates, increased regulation and weak economic prospects for Portugal".