A PORTUGUESE bank in serious danger of insolvency needs to raise hundreds of millions of euros to stay afloat.
The Bank of Portugal (BdP) has demanded that the troubled Banco Português de Negócios (BPN) find a way of raising capital to fill a financial black hole to meet European Central Bank regulations or risk takeover or even foreclosure.
The bank’s new Board of Directors, led by Miguel Cadilhe, has admitted that the bank is failing to comply with the minimum capital ratios set down by the Bank of Portugal.
The bank allegedly has an 800 million euro shortfall, an amount which has not been confirmed by the BdP.
The bank’s troubles have been caused by poor financial management and leadership in what looks increasingly like a repeat performance of the Millennium bcp saga earlier this year.
After analysing BPN accounts, financial watchdog authorities have concluded that the bank’s own funds were static and not being invested correctly, which was putting shareholder dividends at risk. Even more worrying, BPN’s bad debts and losses had been offloaded and hidden away in offshore accounts without informing the Bank of Portugal as it was legally bound to do.
The troubled bank, which has 216 branches and 224,000 clients, is being investigated on various fronts by the BdP, the CMVM financial watchdog regulation body, the Portuguese Insurance Institute (Instituto de Seguros de Portugal), and the Ministério Público through Operation Hurricane which has been investigating alleged crimes of financial malpractice.
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