The bill for the collapse of BES already amounts to eight billion euros

u The so-called BES resolution, adopted 10 years ago on 3 August 2014, has already cost the state treasury around eight billion euros, but the accounts are far from closed and thousands of victims, including families and companies, are also involved in the process.

The eight billion euro bill, according to Lusa’s reports, is the result mainly of the initial capitalization of Novo Banco (the so-called “good bank”, the successor of BES) and the subsequent recapitalization carried out by the Resolution Fund (FdR). The Fund is a public organization financed by all institutions of the banking system.

Novo Banco’s creation required a capitalization of 4.9 billion euros. Part of that, $3.9 billion, came from a loan from the state to the crisis-resolution fund, a sum that the institution intends to repay over 30 years.

In October 2017, 75% of Novo Banco was sold to the North American fund Lone Star, which agreed with the state on a conditional capital mechanism, with which, until 2026 and with a limit of almost 3.9 billion euros, Roosevelt will have to compensate the bank for losses that have jeopardized its capital adequacy ratios.

To date, Novo Banco has received around 3.5 billion euros under this mechanism, of which 2 billion euros correspond to government loans to the bailout fund.

The governor came under heavy criticism

The collapse of BES on August 3, 2014, sparked a wave of criticism against auditors, politicians and regulators, especially the Banco de Portugal and its then governor, Carlos Costa. “They called me a thief. I didn’t steal anything from anyone. Banco de Portugal didn’t steal anything from anyone,” the governor told a parliamentary inquiry in March 2015.

DETAILS
LOSSES UP TO 18 BILLION
The Bank of Portugal, when adopting the resolution led by Carlos Costa, estimated that an unauthorized bankruptcy scenario for BES would result in the Deposit Guarantee Fund alone spending between nine and 18 billion euros to reimburse guaranteed deposits.

ASSETS TODAY 175 MILLION.
The Resolution Fund, an organization financed by the banking system, was declared a preferred creditor in the liquidation of BES. It should receive 2.7 billion euros in priority, but the assets of the “bad BES” today amount to 175 million euros, according to Lusa.

Decision of October 15.

Ten years after the fall of BES, the main criminal case against Ricardo Salgado, the BES/GES trial, is expected to begin on October 15 this year, in which he is accused of 65 crimes. The former banker, now 80, who became known as the “owner of it all” given his influence in the worlds of business and politics, has been diagnosed with Alzheimer’s disease, according to his defense.

Thousands equal a million dollar loss

According to Lusa, the collapse of BES/GES has caused millions in losses to shareholders, creditors and customers: currently, about 2,000 customers have been granted victim status in court and want compensation. In the criminal case, which is due to start in October and in which Ricardo Salgado is the main defendant, thousands of affected customers have requested this status.