Novo Banco said that it is not up to its management to “minimize capital calls in the manner referred to by the Court of Auditors”, considering that it “defended the public interest” with five quarters of positive results.
In a statement released this Tuesday, after revealing an audit by the Court of Auditors (TdC), Novo Banco “considers that, as a unique institution, the public interest has been defined by the competent public authorities, to which is added the interest derived from the law, which sets, in the case of banking activity, very demanding fiduciary objectives, therefore, it does not depend on the administration […] minimize capital requests in the manner provided by the Court of Auditors”.
According to the institution, the Novo Banco “defended the public interest by complying with a restructuring plan which has already led to five consecutive quarters of positive results, thus ensuring the financial sustainability of the entity and eliminating the risks in this regard identified by the Court of Auditors”.
The TdC said today that the management of Novo Banco with state financing “did not protect the public interest”, identifying “risks of conflict of interest” in the operations carried out and “avoidable practices” that weighed down public financing.
Those who bought assets from Novo Banco made a profit of 60% or more (and the taxpayer footed the bill)
“The management of the NB [Novo Banco] with public financing did not safeguard the public interest, since the use of this financing was not optimized (minimized), by verifying the conditions indicated by the court, in the terms requested by the Assembly of the Republic”, says the conclusions of a audit carried out by TdC to Novo Banco.
In its statement, the entity recalled that “it is a private bank, which operates in a regulated market on a European scale, attached to the development of its corporate purpose, defending and safeguarding the interests of its depositors and other clients and the defense of its employees, creditors, shareholders and other interested parties, in compliance with their fiduciary duties provided for in European and national banking legislation”.
Thus, he said, “the management complied with obedience to the law, respect for the contractual conditions negotiated in 2017 by the Portuguese authorities and fiduciary duties towards its clients.”
The bank considers that “the public interest underlying the [sua] reduction […] and the consequent termination of its status as a bridge bank determined the consideration of the ACC [Acordo de Capitalização Contingente] as an essential element to ensure the viability of Novo Banco as a protection mechanism against accumulated losses in specific assets, limited to the minimum to restore capital ratios to the required levels contractually defined”.
For the institution, through this mechanism, “they sought to preserve the stability of the financial system, even if this implied a public recapitalization effort, which had been planned since 2017.”
In fact, after 28 special audits carried out on Novo Banco, it should be noted that not once was there any breach of the management standards agreed with the European Commission, or any breach of the law,” he said. he has highlighted, indicating that “he is analyzing the recommendations sent by the Court of Auditors, taking into account the moment of granting the credits that gave rise to the losses in question”.
Source: Observadora
