Taxpayers continue to fund Portugal’s banks

Portugal’s hapless taxpayers already have been forced to stump up €18 billion to help save the nation’s banks and there’s more pain to come.

Most of the money already has been lost as the State saw fit to nationalise, sell off or liquidate banks at vast losses in the investment.’

Between 2008 and 2017, the State spent €16.7 billion on support for banks.

In 2018, the sum grew by €932 million with the transfer of €792 million to Novo Banco, under the insane sales agreement organised by the Bank of Portugal, (Governor Carlos Costa pictured above) and €140 million loaned to the fund that will pay out to those ripped off in the BES scandal.

It’s not over yet as taxpayers are liable for another potential €5.5 billion as they have provided guarantees to companies in the BPN universe (€2.2 billion). There also are guarantees resulting from Banif (€556 million) as part of the solution found for BES victims (€153 million, after the €140 million down payment,) the list continues.

In 2018, €792 million was transferred to Novo Banco as part of the deal where Lone Star gets the bank and taxpayers pick up any non-performing loan problems. 

In 2008, BPN hastily was nationalised and then sold to the Angolans for €40 million while taxpayers took over the toxic assets. So far, more than €4 billion has been put into BPN, but the final bill may be close to €6 billion if it is not possible to recover assets. In 2019, the bank will receive €548 million and the liability remains open.

In BES, which went tits up in August 2014, was sold at the end of 2017 but not until €4.9 billion was pumped into the bank by the Resolution Fund. At the end of 2017, the bank was ‘sold’ at zero cost to the US Lone Star Fund, which recapitalised it with €1 billion and agreed with the Bank of Portugal that taxpayers will be liable for a further €3.89 billion. Then there’s the various court cases taken out by disgruntled investors, liability unknown.

In the case of Banif, sold to Santander Portugal for €150 million at the end of 2016, the bank was tidied up with more than €2.2 billion of taxpayers’ cash. By 2017, the money injected into Banif amounted to about €3 billion.

Then there’s Caixa Geral de Depósitos at €4.9 billion and counting.

So it goes on and on, until we come to the conservative figure of well over €20 billion thrown at the banking sector, not much of which will ever be seen again.