The Deloitte audit report reveals that in the case of one debtor that generated losses of 40 million euros, the bank only looked for real estate assets in Portugal to recover part of the debt.
Novo Banco had millionaire losses with a few dozen large debtors. However, the institution led by António Ramalho showed failures in the detection and execution of assets that could help recover part of the amounts in debt. This is one of the conclusions of the Deloitte audit conducted as part of the injection of public capital for the year 2020, which was made public this Tuesday.
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“The process of searching the assets of debtors and guarantors has limitations in terms of its scope and timing of implementation,” reads the document that had already been delivered by the government in April to Parliament but only now has been made public.
The third special audit, which does not identify the debtors, also details that the procedures carried out through an external entity “are comprehensive but do not apply to most debtors. On the other hand, the practices implemented internally at Novo Banco do not include the research of all the assets typology of debtors and guarantors and are not performed on a periodic basis, “not allowing the bank to have an updated knowledge of all the assets of debtors and guarantors to ensure better decision making, including on matters of defining the recovery strategy.
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In September 2020, António Ramalho had admitted that “recovering credit is an extraordinarily difficult activity. At a hearing in the Portuguese Parliament, the CEO of the financial institution detailed that there were more than 90,000 executive orders on all continents and a team of 60 people working on this credit recovery.
Already before, in March 2019, the Novo Banco Monitoring Committee, had revealed that the bank had even hired international detectives to investigate the fortunes of a defaulting customer, “but without success,” said Bracinha Vieira, a member of the committee responsible for monitoring the management of Novo Banco’s assets whose losses are covered by the Resolution Fund compensation mechanism.
