Novo Banco is the "new bank", named after the bankruptcy of the BES, Banco Espirito Santo a few years ago and continues to plague the accounts of Portugal and Portuguese. Indeed BES no longer exists since 2014 but its "new bank" comes losses of 1.4 billion euros and calls for resolution fund under the equity mechanism. More than half of this amount results from losses recorded in problematic assets inherited from the BES, and more than 350 million euros are due to regulatory requirements. But when Novo Banco loses money, all Portuguese taxpayers have to pay. Indeed the Resolution Fund is a fund powered by public money. In total, each Portuguese taxpayer will contribute € 140 to save the Novo Banco again. How will Portugal's finances be impacted? Lisbob, the expatriate assistant in Portugal, tells you all about this new loss of Novo Banco.
Even if you are not a Novo Banco customer, you will need to contribute to cover the losses
1.4 BILLION EUROS LOSSES IN 2018
In 2018, Novo Banco recorded a consolidated loss of 1.413 billion euros, down 38.5% compared to the previous year. However, excluding toxic assets, the "new bank" presents for the first time a positive result before taxes, although there remains a balance of 2.2 million euros in 2018. This "positive" result hides a good bad news for the finances of Portugal.
Here are the quarterly results of Novo Banco in recent years : in the red almost all the time!
Indeed, Novo Banco will request the activation of the Resolution Fund to obtain a contribution of 1.149 billion euros. This money comes from public contributions and it is therefore all taxpayers in Portugal who will "contribute" to bail out the coffers of the new bank. In total, each Portuguese taxpayer will contribute € 140 to save the Novo Banco again, even if he is not a customer of Novo Banco because the Resolution Fund is financed with public money, the money of all taxpayers.
Novo Banco agencies disappear across Portugal, but not losses
1% OF GDP FOR THE BANK EITHER 140 € PER PERSON
Once again, Novo Banco leads the public accounts with another loss. If these amounts may seem small compared to what can be heard in other countries, it must be put in perspective with the dimension of Portugal and its economy. Thus this new loss of Novo Banco will cost 1% of Portugal's GDP, which no longer finishes to plummet in the European ranking.
Portugal's GDP shows no magic growth or miraculous economy
As a reminder, Portugal is often acclaimed for its magical "growth" and its miraculous economic recovery worthy of an excursion to Fatima, and this having done the opposite that Greece and refusing the austerity and diktats of the Troika. The truth is different with wages that do not increase or very little, consumer goods at the same price as in France, and a GDP that has been stagnating since 2010, caught up by Romania or Latvia.
This new loss of 1.4 billion euros from Novo Banco will cost 140 euros per capita in Portugal, and the "new bank" does not know when its accounts will return to green. Suffice to say that the move to the fund of Portuguese taxpayers to save the "new bank" is not over. According to official figures, Portugal is enjoying economic growth, but it is normal to wonder whether it is the Portuguese who benefit.
