Bosses charged with rebuilding Portugal's BES bank quit after two months

Sat Sep 13, 2014 1:02pm EDT
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By Andrei Khalip

LISBON (Reuters) - The rebuilding of Portugal's Novo Banco - the successor to Banco Espirito Santo (BES) after a state rescue last month - was dealt a blow on Saturday with the resignation of the three men handpicked by the central bank in July to turn BES round.

Chief Executive Vitor Bento, finance director Joao Moreira Rato and deputy CEO Jose Honorio said they were leaving because their initial mandate to revive the bank with private money had changed too much since the government bailout.

BES, Portugal's largest listed lender, had to be rescued after the collapse of the business empire of its founding Espirito Santo family, whose main holding firms are under creditor protection. Analysts and auditors have warned some losses and liabilities may yet be uncovered at the bank.

The management resignations followed a reported disagreement with the central bank over Novo Banco's long-term strategy.

Weekly newspaper Expresso said earlier on Saturday, before the resignations were announced, that the executives had objected to the central bank's plan to sell Novo Banco as soon as possible to recover the 3.9 billion euros ($5.1 billion) in public funds used in the rescue.

The men were reluctant "to run a project that is not theirs", said the paper, which did not name its sources.

However, the three men denied any conflict.

"Our decision to resign is due to the fact that our mandate significantly changed since we began our roles, in mid-July. During our time at Novo Banco, we have contributed to the stabilization of the bank, taken steps to normalize operations and improve systems and launched a medium-term plan," they said in a joint statement.   Continued...

Vitor Bento smiles before a television interview in Carnaxide, on the outskirts of Lisbon August 7, 2014. REUTERS/Hugo Correia