The Bank of Portugal picked a new chief executive for Novo Banco, successor to Banco Espirito Santo (BES), following the embarrassing resignation of its three top managers appointed only two months ago.
Eduardo Stock da Cunha, 51, an experienced international banker who has worked at lenders like Santander and Lloyds in Britain, Portugal, Spain and the US, became the new head of the bank that the central bank aims to sell off swiftly to recover state loans.
BES, Portugal’s largest listed lender, had to be rescued last month after the collapse of the business empire of its founding Espirito Santo family, whose main holding firms are under creditor protection.
Stock da Cunha’s last job was as auditing and risk area director on the team of Lloyds Banking Group’s Portuguese CEO Antonio Horta Osorio. The two had worked previously at Santander in Portugal.
Jorge Cardoso, board member at the state-owned bank Caixa Geral de Depositos, was named finance director at Novo Banco, Bank of Portugal said in a statement.
The central bank also reiterated its intention to sell the bank to investors “within the shortest reasonable period” to guarantee a stable ownership structure and safeguard the interests of Novo Banco clients.
On Saturday, chief executive Vitor Bento, finance director Joao Moreira Rato and deputy CEO Jose Honorio – all handpicked by the Bank of Portugal in July – said they were leaving because their initial mandate to revive the bank with private money had changed too much since the government bailout.
Weekly newspaper Expresso said on Saturday the executives had objected to the central bank’s plan to sell Novo Banco as soon as possible to recover the €3.9 billion in public funds used in the rescue.
The three men denied any conflict, but said that since the procedure for a swift sale had been launched and was being managed by the central bank, they felt “that the right thing to do is to hand over the reins to another management team”.
Bento’s initial mandate was to save BES using private capital.
Bento was picked by Bank of Portugal Governor Carlos Costa in July to replace Ricardo Salgado, the patriarch of the Espirito Santo family that founded the bank some 150 years ago.
Bento’s management team and the Bank of Portugal have said they suspect illegal activity took place at BES.
This involved the financing of the troubled family businesses using money borrowed from BES clients.