The Novo Banco management team has a 3.9 million euro bonus waiting for them next year. The bank recorded losses of 1,329 million euros last year.
Novo Banco wants to award premiums of almost 1.9 million euros to the executive management team led by António Ramalho. The decision was controversial, largely because the bank had losses of 1,329 million euros last year.
The banking institution requested a new capitalization to the Resolution Fund of 598 million, although the Resolution Fund and the Government have only approved about 430 million, an injection that should happen in the next few days.
Now, according to ECO, the Novo Banco management team already has a waiting list € 3.9 million bonus next year.
Novo Banco is temporarily unable to pay premiums to the administration due to the commitment to Brussels regarding its restructuring. However, you can assign them and make the payment after this period has ended at the end of this year.
The bank has been under fire from the Ministry of Finance, Banco de Portugal, President of the Republic and parties. Last year, the bank led by António Ramalho announced a deferred bonus of 1.997 million euros.
The parties consider it to be “Unacceptable”, “immoral” and “obscene” that the bank awards prizes to managers at a time when they only survive thanks to the funds of the Resolution Fund.
In the 2020 report and accounts, Novo Banco points out that no payments have yet been made and that the amounts allocated are subject to “future adjustments”, which can be lower or even zero.
Thus, the sum of the two bonuses should reach the directors next year, at a time when the bank is no longer covered by the restructuring period.
Even so, the Resolution Fund has subtracted and will again subtract the bonus amount from the injections for the banking institution.
State will keep 13% of the capital
After the Novo Banco’s 2020 report and accounts are known, it is known that the State is practically “Condemned” to be in the hands of about 13% of the capital of Novo Banco, writes Expresso.
The Treasury will become a direct shareholder of the bank, while the bank sees its position about to be halved.
“It is estimated that the conversion rights to be issued and attributed to the State following the negative net results for the years between 2015 and 2019 will give it a stake of up to approximately 12.82% of Novo Banco’s share capital”, read in the document published on the website of the Portuguese Securities Market Commission (CMVM).
This position is slightly lower than it was estimated at the end of the first half of 2020, but it shows that the bank, through the Resolution Fund, will lose a significant part of its position in the bank.
This is due to the special regime applicable to deferred tax assets that Novo Banco resorted to. In this regime, explains the Expresso, “the banks were able to recognize part of these assets by deferred taxes according to special rules, convertible into tax credits (discounts on taxes payable) when they recorded losses”.
But there is a counterpart: the bank has to create a special reserve, destined for the State, 10% of the credit amount. When the majority of the capital was sold to Lone Star, it was established that this regime “will only dilute […] the participation of the Resolution Fund ”.
Thus, the bank will have a harder time getting a refund financing provided to Novo Banco.
Daniel Costa, ZAP //